Correlation Between Matson Money and Franklin Strategic
Can any of the company-specific risk be diversified away by investing in both Matson Money and Franklin Strategic 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 Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matson Money Equity and Franklin Strategic Series, you can compare the effects of market volatilities on Matson Money and Franklin Strategic 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 Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matson Money and Franklin Strategic.
Diversification Opportunities for Matson Money and Franklin Strategic
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Matson and Franklin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Equity and Franklin Strategic Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Strategic Series 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 Equity are associated (or correlated) with Franklin Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Strategic Series has no effect on the direction of Matson Money i.e., Matson Money and Franklin Strategic go up and down completely randomly.
Pair Corralation between Matson Money and Franklin Strategic
Assuming the 90 days horizon Matson Money Equity is expected to generate 3.58 times more return on investment than Franklin Strategic. However, Matson Money is 3.58 times more volatile than Franklin Strategic Series. It trades about 0.1 of its potential returns per unit of risk. Franklin Strategic Series is currently generating about 0.17 per unit of risk. If you would invest 2,976 in Matson Money Equity on September 4, 2024 and sell it today you would earn a total of 791.00 from holding Matson Money Equity or generate 26.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matson Money Equity vs. Franklin Strategic Series
Performance |
| Timeline |
| Matson Money Equity |
| Franklin Strategic Series |
Matson Money and Franklin Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matson Money and Franklin Strategic
The main advantage of trading using opposite Matson Money and Franklin Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matson Money position performs unexpectedly, Franklin Strategic 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 Strategic will offset losses from the drop in Franklin Strategic's long position.| Matson Money vs. Western Asset High | Matson Money vs. T Rowe Price | Matson Money vs. Siit High Yield | Matson Money vs. Calvert High Yield |
| Franklin Strategic vs. Franklin Mutual Beacon | Franklin Strategic vs. Templeton Developing Markets | Franklin Strategic vs. Franklin Mutual Global | Franklin Strategic vs. Franklin Mutual Global |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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