Correlation Between Franklin Growth and Mainstay Wmc
Can any of the company-specific risk be diversified away by investing in both Franklin Growth and Mainstay Wmc 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 Mainstay Wmc 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 Mainstay Wmc Value, you can compare the effects of market volatilities on Franklin Growth and Mainstay Wmc 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 Mainstay Wmc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Mainstay Wmc.
Diversification Opportunities for Franklin Growth and Mainstay Wmc
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Mainstay is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Opportunities and Mainstay Wmc Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Wmc Value 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 Mainstay Wmc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Wmc Value has no effect on the direction of Franklin Growth i.e., Franklin Growth and Mainstay Wmc go up and down completely randomly.
Pair Corralation between Franklin Growth and Mainstay Wmc
Assuming the 90 days horizon Franklin Growth Opportunities is expected to generate 1.75 times more return on investment than Mainstay Wmc. However, Franklin Growth is 1.75 times more volatile than Mainstay Wmc Value. It trades about 0.06 of its potential returns per unit of risk. Mainstay Wmc Value is currently generating about 0.06 per unit of risk. If you would invest 5,477 in Franklin Growth Opportunities on September 14, 2024 and sell it today you would earn a total of 955.00 from holding Franklin Growth Opportunities or generate 17.44% 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. Mainstay Wmc Value
Performance |
| Timeline |
| Franklin Growth Oppo |
| Mainstay Wmc Value |
Franklin Growth and Mainstay Wmc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Growth and Mainstay Wmc
The main advantage of trading using opposite Franklin Growth and Mainstay Wmc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth position performs unexpectedly, Mainstay Wmc 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 Mainstay Wmc will offset losses from the drop in Mainstay Wmc'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 |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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