Correlation Between Franklin Small-mid and Strategic Allocation:
Can any of the company-specific risk be diversified away by investing in both Franklin Small-mid and Strategic 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 Small-mid and Strategic Allocation: into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Small Mid Cap and Strategic Allocation Aggressive, you can compare the effects of market volatilities on Franklin Small-mid and Strategic 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 Small-mid with a short position of Strategic Allocation:. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Small-mid and Strategic Allocation:.
Diversification Opportunities for Franklin Small-mid and Strategic Allocation:
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and STRATEGIC is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Small Mid Cap and Strategic Allocation Aggressiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Allocation: and Franklin Small-mid 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 Small Mid Cap are associated (or correlated) with Strategic Allocation:. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Allocation: has no effect on the direction of Franklin Small-mid i.e., Franklin Small-mid and Strategic Allocation: go up and down completely randomly.
Pair Corralation between Franklin Small-mid and Strategic Allocation:
Assuming the 90 days horizon Franklin Small Mid Cap is expected to generate 1.94 times more return on investment than Strategic Allocation:. However, Franklin Small-mid is 1.94 times more volatile than Strategic Allocation Aggressive. It trades about 0.41 of its potential returns per unit of risk. Strategic Allocation Aggressive is currently generating about 0.43 per unit of risk. If you would invest 4,673 in Franklin Small Mid Cap on September 1, 2024 and sell it today you would earn a total of 450.00 from holding Franklin Small Mid Cap or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Small Mid Cap vs. Strategic Allocation Aggressiv
Performance |
| Timeline |
| Franklin Small Mid |
| Strategic Allocation: |
Franklin Small-mid and Strategic Allocation: Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Small-mid and Strategic Allocation:
The main advantage of trading using opposite Franklin Small-mid and Strategic Allocation: positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Small-mid position performs unexpectedly, Strategic 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 Strategic Allocation: will offset losses from the drop in Strategic Allocation:'s long position.| Franklin Small-mid vs. Lgm Risk Managed | Franklin Small-mid vs. Siit High Yield | Franklin Small-mid vs. T Rowe Price | Franklin Small-mid vs. Federated Institutional High |
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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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