Correlation Between Franklin Balance and Franklin Small
Can any of the company-specific risk be diversified away by investing in both Franklin Balance and Franklin Small 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 Small 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 Small Mid Cap, you can compare the effects of market volatilities on Franklin Balance and Franklin Small 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 Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Balance and Franklin Small.
Diversification Opportunities for Franklin Balance and Franklin Small
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 Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Small Mid 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 Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Small Mid has no effect on the direction of Franklin Balance i.e., Franklin Balance and Franklin Small go up and down completely randomly.
Pair Corralation between Franklin Balance and Franklin Small
Assuming the 90 days horizon Franklin Balance Sheet is expected to under-perform the Franklin Small. In addition to that, Franklin Balance is 1.07 times more volatile than Franklin Small Mid Cap. It trades about -0.51 of its total potential returns per unit of risk. Franklin Small Mid Cap is currently generating about -0.15 per unit of volatility. If you would invest 4,968 in Franklin Small Mid Cap on September 27, 2024 and sell it today you would lose (192.00) from holding Franklin Small Mid Cap or give up 3.86% 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 Small Mid Cap
Performance |
| Timeline |
| Franklin Balance Sheet |
| Franklin Small Mid |
Franklin Balance and Franklin Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Balance and Franklin Small
The main advantage of trading using opposite Franklin Balance and Franklin Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Balance position performs unexpectedly, Franklin Small 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 Small will offset losses from the drop in Franklin Small's long position.| Franklin Balance vs. Franklin Mutual Beacon | Franklin Balance vs. Templeton Developing Markets | Franklin Balance vs. Franklin Mutual Global | Franklin Balance vs. Franklin Mutual Global |
| Franklin Small vs. Franklin Natural Resources | Franklin Small vs. Tortoise Energy Independence | Franklin Small vs. Calvert Global Energy | Franklin Small vs. Jennison Natural Resources |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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