Correlation Between Franklin Connecticut and Franklin New
Can any of the company-specific risk be diversified away by investing in both Franklin Connecticut and Franklin New 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 Connecticut and Franklin New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Necticut Tax Free and Franklin New York, you can compare the effects of market volatilities on Franklin Connecticut and Franklin New 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 Connecticut with a short position of Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Connecticut and Franklin New.
Diversification Opportunities for Franklin Connecticut and Franklin New
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Franklin and Franklin is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Necticut Tax Free and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York and Franklin Connecticut 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 Necticut Tax Free are associated (or correlated) with Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Franklin Connecticut i.e., Franklin Connecticut and Franklin New go up and down completely randomly.
Pair Corralation between Franklin Connecticut and Franklin New
Assuming the 90 days horizon Franklin Connecticut is expected to generate 1.1 times less return on investment than Franklin New. In addition to that, Franklin Connecticut is 1.05 times more volatile than Franklin New York. It trades about 0.06 of its total potential returns per unit of risk. Franklin New York is currently generating about 0.07 per unit of volatility. If you would invest 926.00 in Franklin New York on September 3, 2024 and sell it today you would earn a total of 88.00 from holding Franklin New York or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Necticut Tax Free vs. Franklin New York
Performance |
| Timeline |
| Franklin Necticut Tax |
| Franklin New York |
Franklin Connecticut and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Connecticut and Franklin New
The main advantage of trading using opposite Franklin Connecticut and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Connecticut position performs unexpectedly, Franklin New 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 New will offset losses from the drop in Franklin New's long position.| Franklin Connecticut vs. Transamerica Financial Life | Franklin Connecticut vs. Davis Financial Fund | Franklin Connecticut vs. Fidelity Advisor Financial | Franklin Connecticut vs. Goldman Sachs Financial |
| Franklin New vs. Oppenheimer Rochester | Franklin New vs. Oppenheimer Rochester | Franklin New vs. Vanguard New York | Franklin New vs. Vanguard New York |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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