Correlation Between Franklin Growth and Buffalo Growth
Can any of the company-specific risk be diversified away by investing in both Franklin Growth and Buffalo Growth 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 Buffalo Growth 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 Buffalo Growth, you can compare the effects of market volatilities on Franklin Growth and Buffalo Growth 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 Buffalo Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Buffalo Growth.
Diversification Opportunities for Franklin Growth and Buffalo Growth
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Buffalo is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Opportunities and Buffalo Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buffalo Growth 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 Buffalo Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buffalo Growth has no effect on the direction of Franklin Growth i.e., Franklin Growth and Buffalo Growth go up and down completely randomly.
Pair Corralation between Franklin Growth and Buffalo Growth
Assuming the 90 days horizon Franklin Growth is expected to generate 1.06 times less return on investment than Buffalo Growth. In addition to that, Franklin Growth is 1.16 times more volatile than Buffalo Growth. It trades about 0.06 of its total potential returns per unit of risk. Buffalo Growth is currently generating about 0.07 per unit of volatility. If you would invest 3,033 in Buffalo Growth on September 14, 2024 and sell it today you would earn a total of 591.00 from holding Buffalo Growth or generate 19.49% 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. Buffalo Growth
Performance |
| Timeline |
| Franklin Growth Oppo |
| Buffalo Growth |
Franklin Growth and Buffalo Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Growth and Buffalo Growth
The main advantage of trading using opposite Franklin Growth and Buffalo Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth position performs unexpectedly, Buffalo Growth 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 Buffalo Growth will offset losses from the drop in Buffalo Growth'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 |
| Buffalo Growth vs. The National Tax Free | Buffalo Growth vs. T Rowe Price | Buffalo Growth vs. T Rowe Price | Buffalo Growth vs. Franklin High Yield |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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