Correlation Between Balanced Fund and Franklin California
Can any of the company-specific risk be diversified away by investing in both Balanced Fund and Franklin California 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 Balanced Fund and Franklin California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Retail and Franklin California Tax Free, you can compare the effects of market volatilities on Balanced Fund and Franklin California 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 Balanced Fund with a short position of Franklin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Franklin California.
Diversification Opportunities for Balanced Fund and Franklin California
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Balanced and Franklin is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Retail and Franklin California Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin California Tax and Balanced Fund 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 Balanced Fund Retail are associated (or correlated) with Franklin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin California Tax has no effect on the direction of Balanced Fund i.e., Balanced Fund and Franklin California go up and down completely randomly.
Pair Corralation between Balanced Fund and Franklin California
Assuming the 90 days horizon Balanced Fund Retail is expected to generate 2.57 times more return on investment than Franklin California. However, Balanced Fund is 2.57 times more volatile than Franklin California Tax Free. It trades about 0.08 of its potential returns per unit of risk. Franklin California Tax Free is currently generating about 0.14 per unit of risk. If you would invest 1,350 in Balanced Fund Retail on August 29, 2024 and sell it today you would earn a total of 85.00 from holding Balanced Fund Retail or generate 6.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Fund Retail vs. Franklin California Tax Free
Performance |
| Timeline |
| Balanced Fund Retail |
| Franklin California Tax |
Balanced Fund and Franklin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Franklin California
The main advantage of trading using opposite Balanced Fund and Franklin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund position performs unexpectedly, Franklin California 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 Franklin California will offset losses from the drop in Franklin California's long position.| Balanced Fund vs. All Asset Fund | Balanced Fund vs. HUMANA INC | Balanced Fund vs. Aquagold International | Balanced Fund vs. Barloworld Ltd ADR |
| Franklin California vs. Angel Oak Financial | Franklin California vs. Artisan High Income | Franklin California vs. Blrc Sgy Mnp | Franklin California vs. Prudential Jennison Financial |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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