Correlation Between Franklin and Growth Allocation
Can any of the company-specific risk be diversified away by investing in both Franklin and Growth Allocation 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 Growth Allocation 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 Growth Allocation Fund, you can compare the effects of market volatilities on Franklin and Growth Allocation 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 Growth Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Growth Allocation.
Diversification Opportunities for Franklin and Growth Allocation
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Growth is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Growth Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Allocation 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 Growth Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Allocation has no effect on the direction of Franklin i.e., Franklin and Growth Allocation go up and down completely randomly.
Pair Corralation between Franklin and Growth Allocation
Assuming the 90 days horizon Franklin Government Money is expected to generate 0.23 times more return on investment than Growth Allocation. However, Franklin Government Money is 4.31 times less risky than Growth Allocation. It trades about 0.13 of its potential returns per unit of risk. Growth Allocation Fund is currently generating about 0.02 per unit of risk. If you would invest 99.00 in Franklin Government Money on November 6, 2024 and sell it today you would earn a total of 1.00 from holding Franklin Government Money or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Growth Allocation Fund
Performance |
| Timeline |
| Franklin Government Money |
| Growth Allocation |
Franklin and Growth Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin and Growth Allocation
The main advantage of trading using opposite Franklin and Growth Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin position performs unexpectedly, Growth Allocation 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 Growth Allocation will offset losses from the drop in Growth Allocation's long position.| Franklin vs. Great West Goldman Sachs | Franklin vs. Great West Goldman Sachs | Franklin vs. Vy Goldman Sachs | Franklin vs. Europac Gold Fund |
| Growth Allocation vs. First Eagle Gold | Growth Allocation vs. James Balanced Golden | Growth Allocation vs. Invesco Gold Special | Growth Allocation vs. Short Precious Metals |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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