Correlation Between Franklin Real and Deutsche Capital
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Deutsche Capital 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 Deutsche Capital 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 Deutsche Capital Growth, you can compare the effects of market volatilities on Franklin Real and Deutsche Capital 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 Deutsche Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Deutsche Capital.
Diversification Opportunities for Franklin Real and Deutsche Capital
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Deutsche is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Deutsche Capital Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Capital Growth 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 Deutsche Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Capital Growth has no effect on the direction of Franklin Real i.e., Franklin Real and Deutsche Capital go up and down completely randomly.
Pair Corralation between Franklin Real and Deutsche Capital
Assuming the 90 days horizon Franklin Real Estate is expected to generate 0.82 times more return on investment than Deutsche Capital. However, Franklin Real Estate is 1.23 times less risky than Deutsche Capital. It trades about 0.03 of its potential returns per unit of risk. Deutsche Capital Growth is currently generating about -0.02 per unit of risk. If you would invest 1,694 in Franklin Real Estate on November 27, 2024 and sell it today you would earn a total of 6.00 from holding Franklin Real Estate or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Real Estate vs. Deutsche Capital Growth
Performance |
| Timeline |
| Franklin Real Estate |
| Deutsche Capital Growth |
Franklin Real and Deutsche Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Deutsche Capital
The main advantage of trading using opposite Franklin Real and Deutsche Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Deutsche Capital 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 Deutsche Capital will offset losses from the drop in Deutsche Capital'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 |
| Deutsche Capital vs. Vulcan Value Partners | Deutsche Capital vs. Nt International Small Mid | Deutsche Capital vs. Transamerica International Small | Deutsche Capital vs. Legg Mason Partners |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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