Correlation Between Franklin Growth and Prudential Global
Can any of the company-specific risk be diversified away by investing in both Franklin Growth and Prudential Global 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 Prudential Global 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 Prudential Global Total, you can compare the effects of market volatilities on Franklin Growth and Prudential Global 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 Prudential Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Prudential Global.
Diversification Opportunities for Franklin Growth and Prudential Global
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Prudential is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Opportunities and Prudential Global Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Global Total 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 Prudential Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Global Total has no effect on the direction of Franklin Growth i.e., Franklin Growth and Prudential Global go up and down completely randomly.
Pair Corralation between Franklin Growth and Prudential Global
Assuming the 90 days horizon Franklin Growth Opportunities is expected to under-perform the Prudential Global. In addition to that, Franklin Growth is 2.7 times more volatile than Prudential Global Total. It trades about -0.01 of its total potential returns per unit of risk. Prudential Global Total is currently generating about 0.05 per unit of volatility. If you would invest 523.00 in Prudential Global Total on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Prudential Global Total or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Growth Opportunities vs. Prudential Global Total
Performance |
| Timeline |
| Franklin Growth Oppo |
| Prudential Global Total |
Franklin Growth and Prudential Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Growth and Prudential Global
The main advantage of trading using opposite Franklin Growth and Prudential Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth position performs unexpectedly, Prudential Global 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 Prudential Global will offset losses from the drop in Prudential Global's long position.| Franklin Growth vs. American Funds The | Franklin Growth vs. American Funds The | Franklin Growth vs. Growth Fund Of | Franklin Growth vs. Growth Fund Of |
| Prudential Global vs. Qs Defensive Growth | Prudential Global vs. Qs Growth Fund | Prudential Global vs. Small Pany Growth | Prudential Global vs. Franklin Growth Opportunities |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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