Correlation Between Franklin Balance and Franklin Real
Can any of the company-specific risk be diversified away by investing in both Franklin Balance and Franklin Real 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 Balance and Franklin Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Balance Sheet and Franklin Real Estate, you can compare the effects of market volatilities on Franklin Balance and Franklin Real 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 Balance with a short position of Franklin Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Balance and Franklin Real.
Diversification Opportunities for Franklin Balance and Franklin Real
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Franklin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Balance Sheet and Franklin Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Real Estate and Franklin Balance 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 Balance Sheet are associated (or correlated) with Franklin Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Real Estate has no effect on the direction of Franklin Balance i.e., Franklin Balance and Franklin Real go up and down completely randomly.
Pair Corralation between Franklin Balance and Franklin Real
Assuming the 90 days horizon Franklin Balance Sheet is expected to under-perform the Franklin Real. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Balance Sheet is 1.09 times less risky than Franklin Real. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Franklin Real Estate is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,700 in Franklin Real Estate on December 26, 2024 and sell it today you would lose (23.00) from holding Franklin Real Estate or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Balance Sheet vs. Franklin Real Estate
Performance |
| Timeline |
| Franklin Balance Sheet |
| Franklin Real Estate |
Franklin Balance and Franklin Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Balance and Franklin Real
The main advantage of trading using opposite Franklin Balance and Franklin Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Balance position performs unexpectedly, Franklin Real 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 Franklin Real will offset losses from the drop in Franklin Real's long position.| Franklin Balance vs. Us Government Securities | Franklin Balance vs. Short Term Government Fund | Franklin Balance vs. Us Government Securities | Franklin Balance vs. Government Securities Fund |
| Franklin Real vs. Franklin Natural Resources | Franklin Real vs. Franklin Small Cap | Franklin Real vs. Templeton Developing Markets | Franklin Real vs. Franklin Balance Sheet |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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