Correlation Between Franklin Moderate and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Franklin Moderate and Cohen Steers 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 Moderate and Cohen Steers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Moderate Allocation and Cohen Steers Real, you can compare the effects of market volatilities on Franklin Moderate and Cohen Steers 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 Moderate with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Moderate and Cohen Steers.
Diversification Opportunities for Franklin Moderate and Cohen Steers
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Cohen is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Moderate Allocation and Cohen Steers Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Real and Franklin Moderate 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 Moderate Allocation are associated (or correlated) with Cohen Steers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Steers Real has no effect on the direction of Franklin Moderate i.e., Franklin Moderate and Cohen Steers go up and down completely randomly.
Pair Corralation between Franklin Moderate and Cohen Steers
Assuming the 90 days horizon Franklin Moderate Allocation is expected to generate 0.99 times more return on investment than Cohen Steers. However, Franklin Moderate Allocation is 1.01 times less risky than Cohen Steers. It trades about 0.12 of its potential returns per unit of risk. Cohen Steers Real is currently generating about 0.08 per unit of risk. If you would invest 1,509 in Franklin Moderate Allocation on September 1, 2024 and sell it today you would earn a total of 120.00 from holding Franklin Moderate Allocation or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Moderate Allocation vs. Cohen Steers Real
Performance |
| Timeline |
| Franklin Moderate |
| Cohen Steers Real |
Franklin Moderate and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Moderate and Cohen Steers
The main advantage of trading using opposite Franklin Moderate and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Moderate position performs unexpectedly, Cohen Steers 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 Cohen Steers will offset losses from the drop in Cohen Steers' long position.| Franklin Moderate vs. Jennison Natural Resources | Franklin Moderate vs. Oil Gas Ultrasector | Franklin Moderate vs. Clearbridge Energy Mlp | Franklin Moderate vs. Alpsalerian Energy Infrastructure |
| Cohen Steers vs. Prudential Government Money | Cohen Steers vs. Jpmorgan Trust I | Cohen Steers vs. Transamerica Funds | Cohen Steers vs. John Hancock Money |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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