Correlation Between Franklin Real and Cullen High
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Cullen 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 Real and Cullen High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Real Estate and Cullen High Dividend, you can compare the effects of market volatilities on Franklin Real and Cullen 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 Real with a short position of Cullen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Cullen High.
Diversification Opportunities for Franklin Real and Cullen High
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Cullen is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Cullen High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen High Dividend and Franklin Real 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 Real Estate are associated (or correlated) with Cullen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen High Dividend has no effect on the direction of Franklin Real i.e., Franklin Real and Cullen High go up and down completely randomly.
Pair Corralation between Franklin Real and Cullen High
Assuming the 90 days horizon Franklin Real Estate is expected to generate 1.73 times more return on investment than Cullen High. However, Franklin Real is 1.73 times more volatile than Cullen High Dividend. It trades about 0.12 of its potential returns per unit of risk. Cullen High Dividend is currently generating about 0.07 per unit of risk. If you would invest 1,946 in Franklin Real Estate on August 30, 2024 and sell it today you would earn a total of 52.00 from holding Franklin Real Estate or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Franklin Real Estate vs. Cullen High Dividend
Performance |
| Timeline |
| Franklin Real Estate |
| Cullen High Dividend |
Franklin Real and Cullen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Cullen High
The main advantage of trading using opposite Franklin Real and Cullen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Cullen 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 Cullen High will offset losses from the drop in Cullen High's long position.| Franklin Real vs. Franklin Natural Resources | Franklin Real vs. Franklin Small Cap | Franklin Real vs. Templeton Developing Markets | Franklin Real vs. Franklin Balance Sheet |
| Cullen High vs. Copeland Risk Managed | Cullen High vs. Ab Global Risk | Cullen High vs. Siit High Yield | Cullen High vs. Morningstar Aggressive Growth |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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