Correlation Between Franklin Double and Franklin California
Can any of the company-specific risk be diversified away by investing in both Franklin Double and Franklin California 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 Double and Franklin California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Double Tax Free and Franklin California Insured, you can compare the effects of market volatilities on Franklin Double and Franklin California 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 Double with a short position of Franklin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Double and Franklin California.
Diversification Opportunities for Franklin Double and Franklin California
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Double Tax Free and Franklin California Insured in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin California and Franklin Double 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 Double Tax Free are associated (or correlated) with Franklin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin California has no effect on the direction of Franklin Double i.e., Franklin Double and Franklin California go up and down completely randomly.
Pair Corralation between Franklin Double and Franklin California
If you would invest (100.00) in Franklin California Insured on August 30, 2024 and sell it today you would earn a total of 100.00 from holding Franklin California Insured or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Double Tax Free vs. Franklin California Insured
Performance |
| Timeline |
| Franklin Double Tax |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Franklin California |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Franklin Double and Franklin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Double and Franklin California
The main advantage of trading using opposite Franklin Double and Franklin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Double position performs unexpectedly, Franklin California 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 California will offset losses from the drop in Franklin California's long position.| Franklin Double vs. Dunham Large Cap | Franklin Double vs. Tax Managed Large Cap | Franklin Double vs. Qs Large Cap | Franklin Double vs. Americafirst Large Cap |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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