Correlation Between Franklin Growth and Federated Mdt
Can any of the company-specific risk be diversified away by investing in both Franklin Growth and Federated Mdt 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 Federated Mdt 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 Federated Mdt Balanced, you can compare the effects of market volatilities on Franklin Growth and Federated Mdt 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 Federated Mdt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Federated Mdt.
Diversification Opportunities for Franklin Growth and Federated Mdt
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Federated is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Opportunities and Federated Mdt Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Mdt Balanced 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 Federated Mdt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Mdt Balanced has no effect on the direction of Franklin Growth i.e., Franklin Growth and Federated Mdt go up and down completely randomly.
Pair Corralation between Franklin Growth and Federated Mdt
Assuming the 90 days horizon Franklin Growth is expected to generate 1.05 times less return on investment than Federated Mdt. In addition to that, Franklin Growth is 2.45 times more volatile than Federated Mdt Balanced. It trades about 0.06 of its total potential returns per unit of risk. Federated Mdt Balanced is currently generating about 0.16 per unit of volatility. If you would invest 1,905 in Federated Mdt Balanced on September 4, 2024 and sell it today you would earn a total of 449.00 from holding Federated Mdt Balanced or generate 23.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Franklin Growth Opportunities vs. Federated Mdt Balanced
Performance |
| Timeline |
| Franklin Growth Oppo |
| Federated Mdt Balanced |
Franklin Growth and Federated Mdt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Growth and Federated Mdt
The main advantage of trading using opposite Franklin Growth and Federated Mdt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth position performs unexpectedly, Federated Mdt 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 Federated Mdt will offset losses from the drop in Federated Mdt's long position.| Franklin Growth vs. Ab Global Risk | Franklin Growth vs. Artisan Global Unconstrained | Franklin Growth vs. Ab Global Real | Franklin Growth vs. Dreyfusstandish Global Fixed |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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