Correlation Between Franklin and Financial Industries
Can any of the company-specific risk be diversified away by investing in both Franklin and Financial Industries 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 Financial Industries 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 Financial Industries Fund, you can compare the effects of market volatilities on Franklin and Financial Industries 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 Financial Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Financial Industries.
Diversification Opportunities for Franklin and Financial Industries
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Financial is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Financial Industries Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial Industries 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 Financial Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial Industries has no effect on the direction of Franklin i.e., Franklin and Financial Industries go up and down completely randomly.
Pair Corralation between Franklin and Financial Industries
If you would invest 100.00 in Franklin Government Money on October 10, 2024 and sell it today you would earn a total of 0.00 from holding Franklin Government Money or generate 0.0% 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. Financial Industries Fund
Performance |
| Timeline |
| Franklin Government Money |
| Financial Industries |
Franklin and Financial Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin and Financial Industries
The main advantage of trading using opposite Franklin and Financial Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin position performs unexpectedly, Financial Industries 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 Financial Industries will offset losses from the drop in Financial Industries' long position.| Franklin vs. Stone Ridge Diversified | Franklin vs. Allianzgi Diversified Income | Franklin vs. Fulcrum Diversified Absolute | Franklin vs. Guidepath Conservative Income |
| Financial Industries vs. Dreyfus Government Cash | Financial Industries vs. American Funds Government | Financial Industries vs. Voya Government Money | Financial Industries vs. Inverse Government Long |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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