Correlation Between Franklin North and Franklin Low
Can any of the company-specific risk be diversified away by investing in both Franklin North and Franklin Low 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 North and Franklin Low into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin North Carolina and Franklin Low Duration, you can compare the effects of market volatilities on Franklin North and Franklin Low 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 North with a short position of Franklin Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin North and Franklin Low.
Diversification Opportunities for Franklin North and Franklin Low
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Franklin is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Franklin North Carolina and Franklin Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Low Duration and Franklin North 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 North Carolina are associated (or correlated) with Franklin Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Low Duration has no effect on the direction of Franklin North i.e., Franklin North and Franklin Low go up and down completely randomly.
Pair Corralation between Franklin North and Franklin Low
Assuming the 90 days horizon Franklin North Carolina is expected to generate 1.87 times more return on investment than Franklin Low. However, Franklin North is 1.87 times more volatile than Franklin Low Duration. It trades about 0.14 of its potential returns per unit of risk. Franklin Low Duration is currently generating about 0.19 per unit of risk. If you would invest 1,021 in Franklin North Carolina on August 29, 2024 and sell it today you would earn a total of 42.00 from holding Franklin North Carolina or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Franklin North Carolina vs. Franklin Low Duration
Performance |
| Timeline |
| Franklin North Carolina |
| Franklin Low Duration |
Franklin North and Franklin Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin North and Franklin Low
The main advantage of trading using opposite Franklin North and Franklin Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin North position performs unexpectedly, Franklin Low 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 Low will offset losses from the drop in Franklin Low's long position.| Franklin North vs. Mirova Global Green | Franklin North vs. Artisan High Income | Franklin North vs. Ambrus Core Bond | Franklin North vs. Mesirow Financial Small |
| Franklin Low vs. Permanent Portfolio Class | Franklin Low vs. HUMANA INC | Franklin Low vs. Aquagold International | Franklin Low vs. Barloworld Ltd ADR |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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