Correlation Between Franklin Growth and Europacific Growth
Can any of the company-specific risk be diversified away by investing in both Franklin Growth and Europacific 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 Europacific 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 Europacific Growth Fund, you can compare the effects of market volatilities on Franklin Growth and Europacific 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 Europacific Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Europacific Growth.
Diversification Opportunities for Franklin Growth and Europacific Growth
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Europacific is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Opportunities and Europacific Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europacific 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 Europacific Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europacific Growth has no effect on the direction of Franklin Growth i.e., Franklin Growth and Europacific Growth go up and down completely randomly.
Pair Corralation between Franklin Growth and Europacific Growth
Assuming the 90 days horizon Franklin Growth Opportunities is expected to generate 1.45 times more return on investment than Europacific Growth. However, Franklin Growth is 1.45 times more volatile than Europacific Growth Fund. It trades about 0.09 of its potential returns per unit of risk. Europacific Growth Fund is currently generating about 0.05 per unit of risk. If you would invest 3,873 in Franklin Growth Opportunities on September 14, 2024 and sell it today you would earn a total of 2,559 from holding Franklin Growth Opportunities or generate 66.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Growth Opportunities vs. Europacific Growth Fund
Performance |
| Timeline |
| Franklin Growth Oppo |
| Europacific Growth |
Franklin Growth and Europacific Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Growth and Europacific Growth
The main advantage of trading using opposite Franklin Growth and Europacific Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth position performs unexpectedly, Europacific 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 Europacific Growth will offset losses from the drop in Europacific 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 |
| Europacific Growth vs. Artisan Small Cap | Europacific Growth vs. Franklin Growth Opportunities | Europacific Growth vs. Vy Baron Growth | Europacific Growth vs. Needham Aggressive Growth |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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