Correlation Between Franklin Growth and Inverse Nasdaq
Can any of the company-specific risk be diversified away by investing in both Franklin Growth and Inverse Nasdaq 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 Inverse Nasdaq 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 Inverse Nasdaq 100 Strategy, you can compare the effects of market volatilities on Franklin Growth and Inverse Nasdaq 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 Inverse Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Inverse Nasdaq.
Diversification Opportunities for Franklin Growth and Inverse Nasdaq
-0.98 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Inverse is -0.98. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Opportunities and Inverse Nasdaq 100 Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse Nasdaq 100 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 Inverse Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse Nasdaq 100 has no effect on the direction of Franklin Growth i.e., Franklin Growth and Inverse Nasdaq go up and down completely randomly.
Pair Corralation between Franklin Growth and Inverse Nasdaq
Assuming the 90 days horizon Franklin Growth Opportunities is expected to generate 1.01 times more return on investment than Inverse Nasdaq. However, Franklin Growth is 1.01 times more volatile than Inverse Nasdaq 100 Strategy. It trades about 0.26 of its potential returns per unit of risk. Inverse Nasdaq 100 Strategy is currently generating about -0.17 per unit of risk. If you would invest 6,014 in Franklin Growth Opportunities on September 3, 2024 and sell it today you would earn a total of 330.00 from holding Franklin Growth Opportunities or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Growth Opportunities vs. Inverse Nasdaq 100 Strategy
Performance |
| Timeline |
| Franklin Growth Oppo |
| Inverse Nasdaq 100 |
Franklin Growth and Inverse Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Growth and Inverse Nasdaq
The main advantage of trading using opposite Franklin Growth and Inverse Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth position performs unexpectedly, Inverse Nasdaq 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 Inverse Nasdaq will offset losses from the drop in Inverse Nasdaq's long position.| Franklin Growth vs. Massmutual Select Diversified | Franklin Growth vs. Oklahoma College Savings | Franklin Growth vs. Rbc Emerging Markets | Franklin Growth vs. Kinetics Market Opportunities |
| Inverse Nasdaq vs. L Abbett Growth | Inverse Nasdaq vs. Franklin Growth Opportunities | Inverse Nasdaq vs. Qs Growth Fund | Inverse Nasdaq vs. Qs Moderate 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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