Correlation Between Franklin Real and Federated Ultrashort
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Federated Ultrashort 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 Federated Ultrashort 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 Federated Ultrashort Bond, you can compare the effects of market volatilities on Franklin Real and Federated Ultrashort 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 Federated Ultrashort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Federated Ultrashort.
Diversification Opportunities for Franklin Real and Federated Ultrashort
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FRANKLIN and Federated is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Federated Ultrashort Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Ultrashort Bond 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 Federated Ultrashort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Ultrashort Bond has no effect on the direction of Franklin Real i.e., Franklin Real and Federated Ultrashort go up and down completely randomly.
Pair Corralation between Franklin Real and Federated Ultrashort
Assuming the 90 days horizon Franklin Real Estate is expected to generate 23.17 times more return on investment than Federated Ultrashort. However, Franklin Real is 23.17 times more volatile than Federated Ultrashort Bond. It trades about 0.12 of its potential returns per unit of risk. Federated Ultrashort Bond is currently generating about 0.13 per unit of risk. If you would invest 1,915 in Franklin Real Estate on September 3, 2024 and sell it today you would earn a total of 44.00 from holding Franklin Real Estate or generate 2.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Real Estate vs. Federated Ultrashort Bond
Performance |
Timeline |
Franklin Real Estate |
Federated Ultrashort Bond |
Franklin Real and Federated Ultrashort Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Real and Federated Ultrashort
The main advantage of trading using opposite Franklin Real and Federated Ultrashort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Federated Ultrashort 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 Federated Ultrashort will offset losses from the drop in Federated Ultrashort'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 |
Federated Ultrashort vs. Pace Smallmedium Value | Federated Ultrashort vs. Hennessy Nerstone Mid | Federated Ultrashort vs. Ultrasmall Cap Profund Ultrasmall Cap | Federated Ultrashort vs. Columbia Small 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |