Correlation Between Matson Money and Franklin
Can any of the company-specific risk be diversified away by investing in both Matson Money and Franklin 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 Matson Money and Franklin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matson Money Fixed and Franklin Government Money, you can compare the effects of market volatilities on Matson Money and Franklin 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 Matson Money with a short position of Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matson Money and Franklin.
Diversification Opportunities for Matson Money and Franklin
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Matson and Franklin is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Fixed and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money and Matson Money 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 Matson Money Fixed are associated (or correlated) with Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Matson Money i.e., Matson Money and Franklin go up and down completely randomly.
Pair Corralation between Matson Money and Franklin
Assuming the 90 days horizon Matson Money Fixed is expected to generate 1.05 times more return on investment than Franklin. However, Matson Money is 1.05 times more volatile than Franklin Government Money. It trades about 0.14 of its potential returns per unit of risk. Franklin Government Money is currently generating about 0.13 per unit of risk. If you would invest 2,297 in Matson Money Fixed on August 31, 2024 and sell it today you would earn a total of 171.00 from holding Matson Money Fixed or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Matson Money Fixed vs. Franklin Government Money
Performance |
| Timeline |
| Matson Money Fixed |
| Franklin Government Money |
Matson Money and Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matson Money and Franklin
The main advantage of trading using opposite Matson Money and Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matson Money position performs unexpectedly, Franklin 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 Franklin will offset losses from the drop in Franklin's long position.| Matson Money vs. Fidelity Capital Income | Matson Money vs. Alpine High Yield | Matson Money vs. Prudential Short Duration | Matson Money vs. Artisan High Income |
| Franklin vs. Vanguard Total Stock | Franklin vs. Vanguard 500 Index | Franklin vs. Vanguard Total Stock | Franklin vs. Vanguard Total Stock |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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