Correlation Between Franklin Growth and Research Portfolio
Can any of the company-specific risk be diversified away by investing in both Franklin Growth and Research Portfolio 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 Research Portfolio 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 Research Portfolio Institutional, you can compare the effects of market volatilities on Franklin Growth and Research Portfolio 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 Research Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Research Portfolio.
Diversification Opportunities for Franklin Growth and Research Portfolio
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Franklin and Research is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Opportunities and Research Portfolio Institution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Research Portfolio 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 Research Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Research Portfolio has no effect on the direction of Franklin Growth i.e., Franklin Growth and Research Portfolio go up and down completely randomly.
Pair Corralation between Franklin Growth and Research Portfolio
Assuming the 90 days horizon Franklin Growth is expected to generate 1.28 times less return on investment than Research Portfolio. In addition to that, Franklin Growth is 1.11 times more volatile than Research Portfolio Institutional. It trades about 0.09 of its total potential returns per unit of risk. Research Portfolio Institutional is currently generating about 0.13 per unit of volatility. If you would invest 3,133 in Research Portfolio Institutional on September 14, 2024 and sell it today you would earn a total of 2,980 from holding Research Portfolio Institutional or generate 95.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Franklin Growth Opportunities vs. Research Portfolio Institution
Performance |
| Timeline |
| Franklin Growth Oppo |
| Research Portfolio |
Franklin Growth and Research Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Growth and Research Portfolio
The main advantage of trading using opposite Franklin Growth and Research Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth position performs unexpectedly, Research Portfolio 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 Research Portfolio will offset losses from the drop in Research Portfolio'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 |
| Research Portfolio vs. Champlain Mid Cap | Research Portfolio vs. Needham Aggressive Growth | Research Portfolio vs. Franklin Growth Opportunities | Research Portfolio vs. Ftfa Franklin Templeton 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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