Correlation Between Franklin Rising and Franklin Equity
Can any of the company-specific risk be diversified away by investing in both Franklin Rising and Franklin Equity 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 Rising and Franklin Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Rising Dividends and Franklin Equity Income, you can compare the effects of market volatilities on Franklin Rising and Franklin Equity 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 Rising with a short position of Franklin Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Rising and Franklin Equity.
Diversification Opportunities for Franklin Rising and Franklin Equity
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Franklin is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Rising Dividends and Franklin Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Equity Income and Franklin Rising 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 Rising Dividends are associated (or correlated) with Franklin Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Equity Income has no effect on the direction of Franklin Rising i.e., Franklin Rising and Franklin Equity go up and down completely randomly.
Pair Corralation between Franklin Rising and Franklin Equity
Assuming the 90 days horizon Franklin Rising is expected to generate 1.37 times less return on investment than Franklin Equity. But when comparing it to its historical volatility, Franklin Rising Dividends is 1.05 times less risky than Franklin Equity. It trades about 0.16 of its potential returns per unit of risk. Franklin Equity Income is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 3,476 in Franklin Equity Income on August 29, 2024 and sell it today you would earn a total of 120.00 from holding Franklin Equity Income or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Rising Dividends vs. Franklin Equity Income
Performance |
| Timeline |
| Franklin Rising Dividends |
| Franklin Equity Income |
Franklin Rising and Franklin Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Rising and Franklin Equity
The main advantage of trading using opposite Franklin Rising and Franklin Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Rising position performs unexpectedly, Franklin Equity 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 Equity will offset losses from the drop in Franklin Equity's long position.| Franklin Rising vs. Franklin Mutual Global | Franklin Rising vs. Franklin Growth Fund | Franklin Rising vs. Franklin Dynatech Fund | Franklin Rising vs. Franklin Strategic Income |
| Franklin Equity vs. Franklin Growth Fund | Franklin Equity vs. Franklin Total Return | Franklin Equity vs. Franklin Rising Dividends | Franklin Equity vs. Franklin Strategic Income |
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 CEOs Directory module to screen CEOs from public companies around the world.
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