Correlation Between Franklin Small and Calvert Short
Can any of the company-specific risk be diversified away by investing in both Franklin Small and Calvert Short 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 and Calvert Short 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 Calvert Short Duration, you can compare the effects of market volatilities on Franklin Small and Calvert Short 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 with a short position of Calvert Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Small and Calvert Short.
Diversification Opportunities for Franklin Small and Calvert Short
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Calvert is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Small Mid Cap and Calvert Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Short Duration and Franklin Small 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 Calvert Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Short Duration has no effect on the direction of Franklin Small i.e., Franklin Small and Calvert Short go up and down completely randomly.
Pair Corralation between Franklin Small and Calvert Short
Assuming the 90 days horizon Franklin Small Mid Cap is expected to generate 6.03 times more return on investment than Calvert Short. However, Franklin Small is 6.03 times more volatile than Calvert Short Duration. It trades about 0.09 of its potential returns per unit of risk. Calvert Short Duration is currently generating about 0.13 per unit of risk. If you would invest 3,354 in Franklin Small Mid Cap on September 12, 2024 and sell it today you would earn a total of 1,728 from holding Franklin Small Mid Cap or generate 51.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Small Mid Cap vs. Calvert Short Duration
Performance |
| Timeline |
| Franklin Small Mid |
| Calvert Short Duration |
Franklin Small and Calvert Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Small and Calvert Short
The main advantage of trading using opposite Franklin Small and Calvert Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Small position performs unexpectedly, Calvert Short 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 Calvert Short will offset losses from the drop in Calvert Short's long position.| Franklin Small vs. Balanced Fund Retail | Franklin Small vs. Gmo Global Equity | Franklin Small vs. Qs International Equity | Franklin Small vs. Ab Fixed Income Shares |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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