Correlation Between Franklin Income and Thornburg Investment
Can any of the company-specific risk be diversified away by investing in both Franklin Income and Thornburg Investment 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 Income and Thornburg Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Income Fund and Thornburg Investment Income, you can compare the effects of market volatilities on Franklin Income and Thornburg Investment 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 Income with a short position of Thornburg Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Income and Thornburg Investment.
Diversification Opportunities for Franklin Income and Thornburg Investment
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Thornburg is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Income Fund and Thornburg Investment Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Investment and Franklin Income 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 Income Fund are associated (or correlated) with Thornburg Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Investment has no effect on the direction of Franklin Income i.e., Franklin Income and Thornburg Investment go up and down completely randomly.
Pair Corralation between Franklin Income and Thornburg Investment
Assuming the 90 days horizon Franklin Income Fund is expected to under-perform the Thornburg Investment. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Income Fund is 1.23 times less risky than Thornburg Investment. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Thornburg Investment Income is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,595 in Thornburg Investment Income on September 13, 2024 and sell it today you would lose (8.00) from holding Thornburg Investment Income or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Income Fund vs. Thornburg Investment Income
Performance |
| Timeline |
| Franklin Income |
| Thornburg Investment |
Franklin Income and Thornburg Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Income and Thornburg Investment
The main advantage of trading using opposite Franklin Income and Thornburg Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Income position performs unexpectedly, Thornburg Investment 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 Thornburg Investment will offset losses from the drop in Thornburg Investment's long position.| Franklin Income vs. Boston Partners Longshort | Franklin Income vs. Cmg Ultra Short | Franklin Income vs. Blackrock Short Term Inflat Protected | Franklin Income vs. Quantitative Longshort Equity |
| Thornburg Investment vs. Franklin Income Fund | Thornburg Investment vs. First Eagle Global | Thornburg Investment vs. Blackrock Incm Ptf | Thornburg Investment vs. Oppenheimer International Bond |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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