Correlation Between Franklin Natural and Blk Rk
Can any of the company-specific risk be diversified away by investing in both Franklin Natural and Blk Rk 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 Blk Rk 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 Blk Rk Sg, you can compare the effects of market volatilities on Franklin Natural and Blk Rk 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 Blk Rk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Natural and Blk Rk.
Diversification Opportunities for Franklin Natural and Blk Rk
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Blk is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Natural Resources and Blk Rk Sg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blk Rk Sg 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 Blk Rk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blk Rk Sg has no effect on the direction of Franklin Natural i.e., Franklin Natural and Blk Rk go up and down completely randomly.
Pair Corralation between Franklin Natural and Blk Rk
Assuming the 90 days horizon Franklin Natural Resources is expected to generate 2.86 times more return on investment than Blk Rk. However, Franklin Natural is 2.86 times more volatile than Blk Rk Sg. It trades about 0.28 of its potential returns per unit of risk. Blk Rk Sg is currently generating about -0.06 per unit of risk. If you would invest 2,973 in Franklin Natural Resources on August 28, 2024 and sell it today you would earn a total of 140.00 from holding Franklin Natural Resources or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Natural Resources vs. Blk Rk Sg
Performance |
| Timeline |
| Franklin Natural Res |
| Blk Rk Sg |
Franklin Natural and Blk Rk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Natural and Blk Rk
The main advantage of trading using opposite Franklin Natural and Blk Rk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Natural position performs unexpectedly, Blk Rk 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 Blk Rk will offset losses from the drop in Blk Rk's long position.| Franklin Natural vs. Franklin Mutual Beacon | Franklin Natural vs. Templeton Developing Markets | Franklin Natural vs. Franklin Mutual Global | Franklin Natural vs. Franklin Mutual Global |
| Blk Rk vs. Tiaa Cref Lifecycle Retirement | Blk Rk vs. Moderately Aggressive Balanced | Blk Rk vs. Franklin Lifesmart Retirement | Blk Rk vs. Dimensional Retirement Income |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |