Correlation Between Franklin Connecticut and Franklin High
Can any of the company-specific risk be diversified away by investing in both Franklin Connecticut and Franklin High 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 High 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 High Yield, you can compare the effects of market volatilities on Franklin Connecticut and Franklin High 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 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Connecticut and Franklin High.
Diversification Opportunities for Franklin Connecticut and Franklin High
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and FRANKLIN is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Necticut Tax Free and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield 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 High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Yield has no effect on the direction of Franklin Connecticut i.e., Franklin Connecticut and Franklin High go up and down completely randomly.
Pair Corralation between Franklin Connecticut and Franklin High
Assuming the 90 days horizon Franklin Connecticut is expected to generate 1.72 times less return on investment than Franklin High. But when comparing it to its historical volatility, Franklin Necticut Tax Free is 1.02 times less risky than Franklin High. It trades about 0.05 of its potential returns per unit of risk. Franklin High Yield is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 797.00 in Franklin High Yield on December 1, 2024 and sell it today you would earn a total of 107.00 from holding Franklin High Yield or generate 13.43% 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 High Yield
Performance |
| Timeline |
| Franklin Necticut Tax |
| Franklin High Yield |
Franklin Connecticut and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Connecticut and Franklin High
The main advantage of trading using opposite Franklin Connecticut and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Connecticut position performs unexpectedly, Franklin High 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 High will offset losses from the drop in Franklin High's long position.| Franklin Connecticut vs. Goldman Sachs Emerging | Franklin Connecticut vs. Shelton Emerging Markets | Franklin Connecticut vs. Calvert Developed Market | Franklin Connecticut vs. Pnc Emerging Markets |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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