Correlation Between Franklin Real and Catalystmillburn
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Catalystmillburn 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 Catalystmillburn 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 Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Franklin Real and Catalystmillburn 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 Catalystmillburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Catalystmillburn.
Diversification Opportunities for Franklin Real and Catalystmillburn
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Catalystmillburn is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge 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 Catalystmillburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Franklin Real i.e., Franklin Real and Catalystmillburn go up and down completely randomly.
Pair Corralation between Franklin Real and Catalystmillburn
Assuming the 90 days horizon Franklin Real Estate is expected to generate 1.72 times more return on investment than Catalystmillburn. However, Franklin Real is 1.72 times more volatile than Catalystmillburn Hedge Strategy. It trades about 0.18 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.29 per unit of risk. If you would invest 1,918 in Franklin Real Estate on September 1, 2024 and sell it today you would earn a total of 69.00 from holding Franklin Real Estate or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Real Estate vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Franklin Real Estate |
| Catalystmillburn Hedge |
Franklin Real and Catalystmillburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Catalystmillburn
The main advantage of trading using opposite Franklin Real and Catalystmillburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Catalystmillburn 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 Catalystmillburn will offset losses from the drop in Catalystmillburn'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 |
| Catalystmillburn vs. Jhancock Real Estate | Catalystmillburn vs. Msif Real Estate | Catalystmillburn vs. Pender Real Estate | Catalystmillburn vs. Franklin Real Estate |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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