Correlation Between Franklin Growth and Alpsalerian Energy
Can any of the company-specific risk be diversified away by investing in both Franklin Growth and Alpsalerian Energy 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 Growth and Alpsalerian Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Growth Opportunities and Alpsalerian Energy Infrastructure, you can compare the effects of market volatilities on Franklin Growth and Alpsalerian Energy 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 Growth with a short position of Alpsalerian Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Alpsalerian Energy.
Diversification Opportunities for Franklin Growth and Alpsalerian Energy
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Alpsalerian is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Opportunities and Alpsalerian Energy Infrastruct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpsalerian Energy and Franklin Growth 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 Growth Opportunities are associated (or correlated) with Alpsalerian Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpsalerian Energy has no effect on the direction of Franklin Growth i.e., Franklin Growth and Alpsalerian Energy go up and down completely randomly.
Pair Corralation between Franklin Growth and Alpsalerian Energy
Assuming the 90 days horizon Franklin Growth Opportunities is expected to generate 0.5 times more return on investment than Alpsalerian Energy. However, Franklin Growth Opportunities is 2.01 times less risky than Alpsalerian Energy. It trades about 0.05 of its potential returns per unit of risk. Alpsalerian Energy Infrastructure is currently generating about -0.11 per unit of risk. If you would invest 6,372 in Franklin Growth Opportunities on September 13, 2024 and sell it today you would earn a total of 60.00 from holding Franklin Growth Opportunities or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Growth Opportunities vs. Alpsalerian Energy Infrastruct
Performance |
| Timeline |
| Franklin Growth Oppo |
| Alpsalerian Energy |
Franklin Growth and Alpsalerian Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Growth and Alpsalerian Energy
The main advantage of trading using opposite Franklin Growth and Alpsalerian Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth position performs unexpectedly, Alpsalerian Energy 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 Alpsalerian Energy will offset losses from the drop in Alpsalerian Energy's long position.| Franklin Growth vs. Western Asset Municipal | Franklin Growth vs. Artisan High Income | Franklin Growth vs. Dreyfusstandish Global Fixed | Franklin Growth vs. Dws Government Money |
| Alpsalerian Energy vs. Clearbridge Energy Mlp | Alpsalerian Energy vs. Energy Basic Materials | Alpsalerian Energy vs. Firsthand Alternative Energy | Alpsalerian Energy vs. World Energy 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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