Correlation Between Franklin Bissett and Guardian
Can any of the company-specific risk be diversified away by investing in both Franklin Bissett and Guardian at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Franklin Bissett and Guardian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Bissett Corporate and Guardian i3 Quality, you can compare the effects of market volatilities on Franklin Bissett and Guardian and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Franklin Bissett with a short position of Guardian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Bissett and Guardian.
Diversification Opportunities for Franklin Bissett and Guardian
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Guardian is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Bissett Corporate and Guardian i3 Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian i3 Quality and Franklin Bissett is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Franklin Bissett Corporate are associated (or correlated) with Guardian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian i3 Quality has no effect on the direction of Franklin Bissett i.e., Franklin Bissett and Guardian go up and down completely randomly.
Pair Corralation between Franklin Bissett and Guardian
Assuming the 90 days trading horizon Franklin Bissett is expected to generate 2.01 times less return on investment than Guardian. But when comparing it to its historical volatility, Franklin Bissett Corporate is 3.53 times less risky than Guardian. It trades about 0.26 of its potential returns per unit of risk. Guardian i3 Quality is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,997 in Guardian i3 Quality on September 4, 2024 and sell it today you would earn a total of 101.00 from holding Guardian i3 Quality or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Bissett Corporate vs. Guardian i3 Quality
Performance |
| Timeline |
| Franklin Bissett Cor |
| Guardian i3 Quality |
Franklin Bissett and Guardian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Bissett and Guardian
The main advantage of trading using opposite Franklin Bissett and Guardian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Bissett position performs unexpectedly, Guardian can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Guardian will offset losses from the drop in Guardian's long position.| Franklin Bissett vs. Franklin Global Aggregate | Franklin Bissett vs. Franklin Large Cap | Franklin Bissett vs. Franklin Global Dividend | Franklin Bissett vs. First Trust Senior |
| Guardian vs. Franklin Bissett Corporate | Guardian vs. FT AlphaDEX Industrials | Guardian vs. Dynamic Active Dividend | Guardian vs. BMO Aggregate Bond |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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