Correlation Between Franklin and Chestnut Street
Can any of the company-specific risk be diversified away by investing in both Franklin and Chestnut Street 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 and Chestnut Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Government Money and Chestnut Street Exchange, you can compare the effects of market volatilities on Franklin and Chestnut Street 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 with a short position of Chestnut Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Chestnut Street.
Diversification Opportunities for Franklin and Chestnut Street
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Chestnut is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Chestnut Street Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chestnut Street Exchange and Franklin 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 Government Money are associated (or correlated) with Chestnut Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chestnut Street Exchange has no effect on the direction of Franklin i.e., Franklin and Chestnut Street go up and down completely randomly.
Pair Corralation between Franklin and Chestnut Street
If you would invest 115,108 in Chestnut Street Exchange on October 25, 2024 and sell it today you would earn a total of 1,349 from holding Chestnut Street Exchange or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Chestnut Street Exchange
Performance |
| Timeline |
| Franklin Government Money |
| Chestnut Street Exchange |
Franklin and Chestnut Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin and Chestnut Street
The main advantage of trading using opposite Franklin and Chestnut Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin position performs unexpectedly, Chestnut Street 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 Chestnut Street will offset losses from the drop in Chestnut Street's long position.| Franklin vs. Virtus Convertible | Franklin vs. Gabelli Convertible And | Franklin vs. Putnam Convertible Securities | Franklin vs. Columbia Convertible Securities |
| Chestnut Street vs. Df Dent Small | Chestnut Street vs. Smallcap Fund Fka | Chestnut Street vs. Artisan Small Cap | Chestnut Street vs. Vy Columbia Small |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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