Correlation Between Franklin Maryland and Western Asset
Can any of the company-specific risk be diversified away by investing in both Franklin Maryland and Western Asset 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 Western Asset 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 Western Asset Porate, you can compare the effects of market volatilities on Franklin Maryland and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Maryland and Western Asset.
Diversification Opportunities for Franklin Maryland and Western Asset
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Western is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Maryland Tax Free and Western Asset Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Porate 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Porate has no effect on the direction of Franklin Maryland i.e., Franklin Maryland and Western Asset go up and down completely randomly.
Pair Corralation between Franklin Maryland and Western Asset
Assuming the 90 days horizon Franklin Maryland is expected to generate 1.32 times less return on investment than Western Asset. But when comparing it to its historical volatility, Franklin Maryland Tax Free is 1.35 times less risky than Western Asset. It trades about 0.08 of its potential returns per unit of risk. Western Asset Porate is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,015 in Western Asset Porate on November 28, 2024 and sell it today you would earn a total of 49.00 from holding Western Asset Porate or generate 4.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Maryland Tax Free vs. Western Asset Porate
Performance |
| Timeline |
| Franklin Maryland Tax |
| Western Asset Porate |
Franklin Maryland and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Maryland and Western Asset
The main advantage of trading using opposite Franklin Maryland and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Maryland position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Franklin Maryland vs. Rationalrgn Hedged Equity | Franklin Maryland vs. T Rowe Price | Franklin Maryland vs. Doubleline Emerging Markets | Franklin Maryland vs. Ultra Short Fixed Income |
| Western Asset vs. Sprott Gold Equity | Western Asset vs. Global Gold Fund | Western Asset vs. Europac Gold Fund | Western Asset vs. Gamco Global Gold |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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