Correlation Between Franklin North and Franklin New
Can any of the company-specific risk be diversified away by investing in both Franklin North and Franklin New 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 New 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 New Jersey, you can compare the effects of market volatilities on Franklin North and Franklin New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin North and Franklin New.
Diversification Opportunities for Franklin North and Franklin New
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 North Carolina and Franklin New Jersey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New Jersey 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New Jersey has no effect on the direction of Franklin North i.e., Franklin North and Franklin New go up and down completely randomly.
Pair Corralation between Franklin North and Franklin New
Assuming the 90 days horizon Franklin North Carolina is expected to generate 1.04 times more return on investment than Franklin New. However, Franklin North is 1.04 times more volatile than Franklin New Jersey. It trades about 0.2 of its potential returns per unit of risk. Franklin New Jersey is currently generating about 0.2 per unit of risk. If you would invest 1,050 in Franklin North Carolina on September 1, 2024 and sell it today you would earn a total of 15.00 from holding Franklin North Carolina or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin North Carolina vs. Franklin New Jersey
Performance |
| Timeline |
| Franklin North Carolina |
| Franklin New Jersey |
Franklin North and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin North and Franklin New
The main advantage of trading using opposite Franklin North and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin North position performs unexpectedly, Franklin New 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 New will offset losses from the drop in Franklin New's long position.| Franklin North vs. Franklin Mutual Beacon | Franklin North vs. Templeton Developing Markets | Franklin North vs. Franklin Mutual Global | Franklin North vs. Franklin Mutual Global |
| Franklin New vs. Franklin Mutual Beacon | Franklin New vs. Templeton Developing Markets | Franklin New vs. Franklin Mutual Global | Franklin New vs. Franklin Mutual Global |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |