Correlation Between Franklin Strategic and Franklin Rising
Can any of the company-specific risk be diversified away by investing in both Franklin Strategic and Franklin Rising 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 Strategic and Franklin Rising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Strategic Series and Franklin Rising Dividends, you can compare the effects of market volatilities on Franklin Strategic and Franklin Rising 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 Strategic with a short position of Franklin Rising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Strategic and Franklin Rising.
Diversification Opportunities for Franklin Strategic and Franklin Rising
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and Franklin is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Strategic Series and Franklin Rising Dividends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Rising Dividends and Franklin Strategic 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 Strategic Series are associated (or correlated) with Franklin Rising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Rising Dividends has no effect on the direction of Franklin Strategic i.e., Franklin Strategic and Franklin Rising go up and down completely randomly.
Pair Corralation between Franklin Strategic and Franklin Rising
Assuming the 90 days horizon Franklin Strategic Series is expected to generate 0.8 times more return on investment than Franklin Rising. However, Franklin Strategic Series is 1.25 times less risky than Franklin Rising. It trades about 0.11 of its potential returns per unit of risk. Franklin Rising Dividends is currently generating about -0.08 per unit of risk. If you would invest 1,276 in Franklin Strategic Series on December 1, 2024 and sell it today you would earn a total of 15.00 from holding Franklin Strategic Series or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Strategic Series vs. Franklin Rising Dividends
Performance |
| Timeline |
| Franklin Strategic Series |
| Franklin Rising Dividends |
Franklin Strategic and Franklin Rising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Strategic and Franklin Rising
The main advantage of trading using opposite Franklin Strategic and Franklin Rising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Strategic position performs unexpectedly, Franklin Rising 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 Rising will offset losses from the drop in Franklin Rising's long position.| Franklin Strategic vs. Franklin Mutual Beacon | Franklin Strategic vs. Templeton Developing Markets | Franklin Strategic vs. Franklin Mutual Global | Franklin Strategic vs. Franklin Mutual Global |
| Franklin Rising vs. Dunham High Yield | Franklin Rising vs. Pace High Yield | Franklin Rising vs. Voya High Yield | Franklin Rising vs. Payden High Income |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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