Correlation Between Franklin Connecticut and Franklin Maryland
Can any of the company-specific risk be diversified away by investing in both Franklin Connecticut and Franklin Maryland 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 Maryland 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 Maryland Tax Free, you can compare the effects of market volatilities on Franklin Connecticut and Franklin Maryland 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 Maryland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Connecticut and Franklin Maryland.
Diversification Opportunities for Franklin Connecticut and Franklin Maryland
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 Maryland Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Maryland Tax 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 Maryland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Maryland Tax has no effect on the direction of Franklin Connecticut i.e., Franklin Connecticut and Franklin Maryland go up and down completely randomly.
Pair Corralation between Franklin Connecticut and Franklin Maryland
Assuming the 90 days horizon Franklin Necticut Tax Free is expected to generate 1.06 times more return on investment than Franklin Maryland. However, Franklin Connecticut is 1.06 times more volatile than Franklin Maryland Tax Free. It trades about 0.14 of its potential returns per unit of risk. Franklin Maryland Tax Free is currently generating about 0.14 per unit of risk. If you would invest 824.00 in Franklin Necticut Tax Free on September 4, 2024 and sell it today you would earn a total of 104.00 from holding Franklin Necticut Tax Free or generate 12.62% 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 Maryland Tax Free
Performance |
| Timeline |
| Franklin Necticut Tax |
| Franklin Maryland Tax |
Franklin Connecticut and Franklin Maryland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Connecticut and Franklin Maryland
The main advantage of trading using opposite Franklin Connecticut and Franklin Maryland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Connecticut position performs unexpectedly, Franklin Maryland 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 Maryland will offset losses from the drop in Franklin Maryland's long position.| Franklin Connecticut vs. Nuveen Real Estate | Franklin Connecticut vs. Fidelity Real Estate | Franklin Connecticut vs. Columbia Real Estate | Franklin Connecticut vs. Deutsche Real Estate |
| Franklin Maryland vs. Fidelity Capital Income | Franklin Maryland vs. Artisan High Income | Franklin Maryland vs. Guggenheim High Yield | Franklin Maryland vs. Pace 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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