Correlation Between Franklin Real and Tax-exempt Fund
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Tax-exempt Fund 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 Tax-exempt Fund 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 Tax Exempt Fund Of, you can compare the effects of market volatilities on Franklin Real and Tax-exempt Fund 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 Tax-exempt Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Tax-exempt Fund.
Diversification Opportunities for Franklin Real and Tax-exempt Fund
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Tax-exempt is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Tax Exempt Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tax Exempt Fund 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 Tax-exempt Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tax Exempt Fund has no effect on the direction of Franklin Real i.e., Franklin Real and Tax-exempt Fund go up and down completely randomly.
Pair Corralation between Franklin Real and Tax-exempt Fund
Assuming the 90 days horizon Franklin Real Estate is expected to generate 3.06 times more return on investment than Tax-exempt Fund. However, Franklin Real is 3.06 times more volatile than Tax Exempt Fund Of. It trades about 0.25 of its potential returns per unit of risk. Tax Exempt Fund Of is currently generating about 0.19 per unit of risk. If you would invest 1,897 in Franklin Real Estate on September 2, 2024 and sell it today you would earn a total of 90.00 from holding Franklin Real Estate or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Real Estate vs. Tax Exempt Fund Of
Performance |
| Timeline |
| Franklin Real Estate |
| Tax Exempt Fund |
Franklin Real and Tax-exempt Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Tax-exempt Fund
The main advantage of trading using opposite Franklin Real and Tax-exempt Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Tax-exempt Fund 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 Tax-exempt Fund will offset losses from the drop in Tax-exempt Fund's long position.| Franklin Real vs. Realty Income | Franklin Real vs. Dynex Capital | Franklin Real vs. First Industrial Realty | Franklin Real vs. Healthcare Realty Trust |
| Tax-exempt Fund vs. Columbia Real Estate | Tax-exempt Fund vs. Commonwealth Real Estate | Tax-exempt Fund vs. Pender Real Estate | Tax-exempt Fund 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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