Correlation Between Franklin Growth and Qs Moderate
Can any of the company-specific risk be diversified away by investing in both Franklin Growth and Qs Moderate 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 Qs Moderate 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 Qs Moderate Growth, you can compare the effects of market volatilities on Franklin Growth and Qs Moderate 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 Qs Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Qs Moderate.
Diversification Opportunities for Franklin Growth and Qs Moderate
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and SCGCX is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Opportunities and Qs Moderate Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs Moderate Growth 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 Qs Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs Moderate Growth has no effect on the direction of Franklin Growth i.e., Franklin Growth and Qs Moderate go up and down completely randomly.
Pair Corralation between Franklin Growth and Qs Moderate
Assuming the 90 days horizon Franklin Growth Opportunities is expected to generate 2.05 times more return on investment than Qs Moderate. However, Franklin Growth is 2.05 times more volatile than Qs Moderate Growth. It trades about 0.11 of its potential returns per unit of risk. Qs Moderate Growth is currently generating about 0.15 per unit of risk. If you would invest 6,140 in Franklin Growth Opportunities on August 28, 2024 and sell it today you would earn a total of 169.00 from holding Franklin Growth Opportunities or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Growth Opportunities vs. Qs Moderate Growth
Performance |
| Timeline |
| Franklin Growth Oppo |
| Qs Moderate Growth |
Franklin Growth and Qs Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Growth and Qs Moderate
The main advantage of trading using opposite Franklin Growth and Qs Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth position performs unexpectedly, Qs Moderate 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 Qs Moderate will offset losses from the drop in Qs Moderate's long position.| Franklin Growth vs. Franklin Mutual Beacon | Franklin Growth vs. Templeton Developing Markets | Franklin Growth vs. Franklin Mutual Global | Franklin Growth vs. Franklin Mutual Global |
| Qs Moderate vs. Clearbridge Aggressive Growth | Qs Moderate vs. Clearbridge Small Cap | Qs Moderate vs. Qs International Equity | Qs Moderate vs. Clearbridge Appreciation Fund |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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