Correlation Between Franklin Real and Standpoint Multi-asset
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Standpoint Multi-asset 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 Standpoint Multi-asset 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 Standpoint Multi Asset, you can compare the effects of market volatilities on Franklin Real and Standpoint Multi-asset 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 Standpoint Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Standpoint Multi-asset.
Diversification Opportunities for Franklin Real and Standpoint Multi-asset
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Standpoint is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Standpoint Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standpoint Multi Asset 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 Standpoint Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standpoint Multi Asset has no effect on the direction of Franklin Real i.e., Franklin Real and Standpoint Multi-asset go up and down completely randomly.
Pair Corralation between Franklin Real and Standpoint Multi-asset
Assuming the 90 days horizon Franklin Real Estate is expected to generate 1.09 times more return on investment than Standpoint Multi-asset. However, Franklin Real is 1.09 times more volatile than Standpoint Multi Asset. It trades about 0.17 of its potential returns per unit of risk. Standpoint Multi Asset is currently generating about 0.01 per unit of risk. If you would invest 1,665 in Franklin Real Estate on September 1, 2024 and sell it today you would earn a total of 322.00 from holding Franklin Real Estate or generate 19.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Franklin Real Estate vs. Standpoint Multi Asset
Performance |
| Timeline |
| Franklin Real Estate |
| Standpoint Multi Asset |
Franklin Real and Standpoint Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Standpoint Multi-asset
The main advantage of trading using opposite Franklin Real and Standpoint Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Standpoint Multi-asset 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 Standpoint Multi-asset will offset losses from the drop in Standpoint Multi-asset'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 |
| Standpoint Multi-asset vs. Standpoint Multi Asset | Standpoint Multi-asset vs. Mid Cap 15x Strategy | Standpoint Multi-asset vs. Thrivent High Yield | Standpoint Multi-asset vs. American High Income Municipal |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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