Correlation Between Franklin Small and Catalystsmh High
Can any of the company-specific risk be diversified away by investing in both Franklin Small and Catalystsmh High 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 Small and Catalystsmh High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Small Cap and Catalystsmh High Income, you can compare the effects of market volatilities on Franklin Small and Catalystsmh High 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 Small with a short position of Catalystsmh High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Small and Catalystsmh High.
Diversification Opportunities for Franklin Small and Catalystsmh High
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Catalystsmh is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Small Cap and Catalystsmh High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystsmh High Income and Franklin Small 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 Small Cap are associated (or correlated) with Catalystsmh High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystsmh High Income has no effect on the direction of Franklin Small i.e., Franklin Small and Catalystsmh High go up and down completely randomly.
Pair Corralation between Franklin Small and Catalystsmh High
Assuming the 90 days horizon Franklin Small Cap is expected to generate 3.65 times more return on investment than Catalystsmh High. However, Franklin Small is 3.65 times more volatile than Catalystsmh High Income. It trades about 0.05 of its potential returns per unit of risk. Catalystsmh High Income is currently generating about 0.14 per unit of risk. If you would invest 5,245 in Franklin Small Cap on September 14, 2024 and sell it today you would earn a total of 1,566 from holding Franklin Small Cap or generate 29.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Small Cap vs. Catalystsmh High Income
Performance |
| Timeline |
| Franklin Small Cap |
| Catalystsmh High Income |
Franklin Small and Catalystsmh High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Small and Catalystsmh High
The main advantage of trading using opposite Franklin Small and Catalystsmh High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Small position performs unexpectedly, Catalystsmh High 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 Catalystsmh High will offset losses from the drop in Catalystsmh High's long position.| Franklin Small vs. Small Pany Growth | Franklin Small vs. Foundry Partners Fundamental | Franklin Small vs. Ab Small Cap | Franklin Small vs. Guidemark Smallmid Cap |
| Catalystsmh High vs. Franklin Small Cap | Catalystsmh High vs. Cardinal Small Cap | Catalystsmh High vs. Ab Small Cap | Catalystsmh High vs. Guidemark Smallmid Cap |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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