Correlation Between Franklin Liberty and Pacer Trendpilot
Can any of the company-specific risk be diversified away by investing in both Franklin Liberty and Pacer Trendpilot 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 Liberty and Pacer Trendpilot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Liberty Investment and Pacer Trendpilot Bond, you can compare the effects of market volatilities on Franklin Liberty and Pacer Trendpilot 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 Liberty with a short position of Pacer Trendpilot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Liberty and Pacer Trendpilot.
Diversification Opportunities for Franklin Liberty and Pacer Trendpilot
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Pacer is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Liberty Investment and Pacer Trendpilot Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Trendpilot Bond and Franklin Liberty 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 Liberty Investment are associated (or correlated) with Pacer Trendpilot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Trendpilot Bond has no effect on the direction of Franklin Liberty i.e., Franklin Liberty and Pacer Trendpilot go up and down completely randomly.
Pair Corralation between Franklin Liberty and Pacer Trendpilot
Given the investment horizon of 90 days Franklin Liberty is expected to generate 1.05 times less return on investment than Pacer Trendpilot. In addition to that, Franklin Liberty is 1.16 times more volatile than Pacer Trendpilot Bond. It trades about 0.09 of its total potential returns per unit of risk. Pacer Trendpilot Bond is currently generating about 0.1 per unit of volatility. If you would invest 1,802 in Pacer Trendpilot Bond on September 12, 2024 and sell it today you would earn a total of 234.00 from holding Pacer Trendpilot Bond or generate 12.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Liberty Investment vs. Pacer Trendpilot Bond
Performance |
| Timeline |
| Franklin Liberty Inv |
| Pacer Trendpilot Bond |
Franklin Liberty and Pacer Trendpilot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Liberty and Pacer Trendpilot
The main advantage of trading using opposite Franklin Liberty and Pacer Trendpilot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Liberty position performs unexpectedly, Pacer Trendpilot 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 Pacer Trendpilot will offset losses from the drop in Pacer Trendpilot's long position.| Franklin Liberty vs. American Century STOXX | Franklin Liberty vs. Aquagold International | Franklin Liberty vs. Morningstar Unconstrained Allocation | Franklin Liberty vs. Thrivent High Yield |
| Pacer Trendpilot vs. American Century STOXX | Pacer Trendpilot vs. Franklin Liberty Investment | Pacer Trendpilot vs. Aquagold International | Pacer Trendpilot vs. Morningstar Unconstrained Allocation |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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