Correlation Between Franklin Real and Mainstay Equity
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Mainstay 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 Real and Mainstay Equity 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 Mainstay Equity Etf, you can compare the effects of market volatilities on Franklin Real and Mainstay 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 Real with a short position of Mainstay Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Mainstay Equity.
Diversification Opportunities for Franklin Real and Mainstay Equity
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Mainstay is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Mainstay Equity Etf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Equity Etf 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 Mainstay Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Equity Etf has no effect on the direction of Franklin Real i.e., Franklin Real and Mainstay Equity go up and down completely randomly.
Pair Corralation between Franklin Real and Mainstay Equity
Assuming the 90 days horizon Franklin Real Estate is expected to generate 1.14 times more return on investment than Mainstay Equity. However, Franklin Real is 1.14 times more volatile than Mainstay Equity Etf. It trades about 0.14 of its potential returns per unit of risk. Mainstay Equity Etf is currently generating about -0.11 per unit of risk. If you would invest 1,674 in Franklin Real Estate on November 29, 2024 and sell it today you would earn a total of 37.00 from holding Franklin Real Estate or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Real Estate vs. Mainstay Equity Etf
Performance |
| Timeline |
| Franklin Real Estate |
| Mainstay Equity Etf |
Franklin Real and Mainstay Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Mainstay Equity
The main advantage of trading using opposite Franklin Real and Mainstay Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Mainstay 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 Mainstay Equity will offset losses from the drop in Mainstay Equity'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 |
| Mainstay Equity vs. Invesco Vertible Securities | Mainstay Equity vs. Columbia Convertible Securities | Mainstay Equity vs. Invesco Vertible Securities | Mainstay Equity vs. Victory Incore Investment |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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