Correlation Between Franklin Pennsylvania and Amg River
Can any of the company-specific risk be diversified away by investing in both Franklin Pennsylvania and Amg River 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 Pennsylvania and Amg River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Pennsylvania Tax Free and Amg River Road, you can compare the effects of market volatilities on Franklin Pennsylvania and Amg River 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 Pennsylvania with a short position of Amg River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Pennsylvania and Amg River.
Diversification Opportunities for Franklin Pennsylvania and Amg River
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and AMG is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Pennsylvania Tax Free and Amg River Road in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg River Road and Franklin Pennsylvania 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 Pennsylvania Tax Free are associated (or correlated) with Amg River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg River Road has no effect on the direction of Franklin Pennsylvania i.e., Franklin Pennsylvania and Amg River go up and down completely randomly.
Pair Corralation between Franklin Pennsylvania and Amg River
Assuming the 90 days horizon Franklin Pennsylvania is expected to generate 3.8 times less return on investment than Amg River. But when comparing it to its historical volatility, Franklin Pennsylvania Tax Free is 4.18 times less risky than Amg River. It trades about 0.09 of its potential returns per unit of risk. Amg River Road is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,466 in Amg River Road on September 4, 2024 and sell it today you would earn a total of 317.00 from holding Amg River Road or generate 21.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Franklin Pennsylvania Tax Free vs. Amg River Road
Performance |
| Timeline |
| Franklin Pennsylvania |
| Amg River Road |
Franklin Pennsylvania and Amg River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Pennsylvania and Amg River
The main advantage of trading using opposite Franklin Pennsylvania and Amg River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Pennsylvania position performs unexpectedly, Amg River 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 Amg River will offset losses from the drop in Amg River's long position.| Franklin Pennsylvania vs. Qs Large Cap | Franklin Pennsylvania vs. Qs Large Cap | Franklin Pennsylvania vs. Dana Large Cap | Franklin Pennsylvania vs. Vela Large Cap |
| Amg River vs. Alger Smallcap Growth | Amg River vs. Deutsche Global Real | Amg River vs. Amg River Road | Amg River vs. Delaware Value Fund |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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