Correlation Between Franklin Natural and Hartford Capital
Can any of the company-specific risk be diversified away by investing in both Franklin Natural and Hartford Capital 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 Natural and Hartford Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Natural Resources and Hartford Capital Appreciation, you can compare the effects of market volatilities on Franklin Natural and Hartford Capital 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 Natural with a short position of Hartford Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Natural and Hartford Capital.
Diversification Opportunities for Franklin Natural and Hartford Capital
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Hartford is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Natural Resources and Hartford Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Capital App and Franklin Natural 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 Natural Resources are associated (or correlated) with Hartford Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Capital App has no effect on the direction of Franklin Natural i.e., Franklin Natural and Hartford Capital go up and down completely randomly.
Pair Corralation between Franklin Natural and Hartford Capital
Assuming the 90 days horizon Franklin Natural Resources is expected to generate 1.06 times more return on investment than Hartford Capital. However, Franklin Natural is 1.06 times more volatile than Hartford Capital Appreciation. It trades about 0.19 of its potential returns per unit of risk. Hartford Capital Appreciation is currently generating about 0.16 per unit of risk. If you would invest 2,953 in Franklin Natural Resources on August 30, 2024 and sell it today you would earn a total of 106.00 from holding Franklin Natural Resources or generate 3.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Natural Resources vs. Hartford Capital Appreciation
Performance |
| Timeline |
| Franklin Natural Res |
| Hartford Capital App |
Franklin Natural and Hartford Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Natural and Hartford Capital
The main advantage of trading using opposite Franklin Natural and Hartford Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Natural position performs unexpectedly, Hartford Capital 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 Hartford Capital will offset losses from the drop in Hartford Capital's long position.| Franklin Natural vs. Ab Select Longshort | Franklin Natural vs. Federated Short Intermediate Duration | Franklin Natural vs. T Rowe Price | Franklin Natural vs. Astor Longshort Fund |
| Hartford Capital vs. Artisan High Income | Hartford Capital vs. Prudential High Yield | Hartford Capital vs. Siit High Yield | Hartford Capital vs. Gmo High Yield |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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