Correlation Between Franklin Maryland and Franklin Small
Can any of the company-specific risk be diversified away by investing in both Franklin Maryland and Franklin Small 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 Maryland and Franklin Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Maryland Tax Free and Franklin Small Cap, you can compare the effects of market volatilities on Franklin Maryland and Franklin Small 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 Maryland with a short position of Franklin Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Maryland and Franklin Small.
Diversification Opportunities for Franklin Maryland and Franklin Small
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Franklin is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Maryland Tax Free and Franklin Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Small Cap and Franklin Maryland 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 Maryland Tax Free are associated (or correlated) with Franklin Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Small Cap has no effect on the direction of Franklin Maryland i.e., Franklin Maryland and Franklin Small go up and down completely randomly.
Pair Corralation between Franklin Maryland and Franklin Small
Assuming the 90 days horizon Franklin Maryland is expected to generate 2.1 times less return on investment than Franklin Small. But when comparing it to its historical volatility, Franklin Maryland Tax Free is 4.58 times less risky than Franklin Small. It trades about 0.04 of its potential returns per unit of risk. Franklin Small Cap is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,370 in Franklin Small Cap on November 2, 2024 and sell it today you would earn a total of 403.00 from holding Franklin Small Cap or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Maryland Tax Free vs. Franklin Small Cap
Performance |
| Timeline |
| Franklin Maryland Tax |
| Franklin Small Cap |
Franklin Maryland and Franklin Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Maryland and Franklin Small
The main advantage of trading using opposite Franklin Maryland and Franklin Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Maryland position performs unexpectedly, Franklin Small 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 Small will offset losses from the drop in Franklin Small's long position.| Franklin Maryland vs. Fuhkbx | Franklin Maryland vs. Fwnhtx | Franklin Maryland vs. Fznopx | Franklin Maryland vs. Abr 7525 Volatility |
| Franklin Small vs. Franklin Rising Dividends | Franklin Small vs. Franklin Mutual Global | Franklin Small vs. Franklin Mutual Shares | Franklin Small vs. Franklin Growth 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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