Correlation Between Franklin Real and Columbia Real
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Columbia Real 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 Columbia Real 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 Columbia Real Estate, you can compare the effects of market volatilities on Franklin Real and Columbia Real 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 Columbia Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Columbia Real.
Diversification Opportunities for Franklin Real and Columbia Real
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Columbia is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Columbia Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Real Estate 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 Columbia Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Real Estate has no effect on the direction of Franklin Real i.e., Franklin Real and Columbia Real go up and down completely randomly.
Pair Corralation between Franklin Real and Columbia Real
Assuming the 90 days horizon Franklin Real is expected to generate 1.47 times less return on investment than Columbia Real. But when comparing it to its historical volatility, Franklin Real Estate is 1.02 times less risky than Columbia Real. It trades about 0.04 of its potential returns per unit of risk. Columbia Real Estate is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 909.00 in Columbia Real Estate on September 4, 2024 and sell it today you would earn a total of 244.00 from holding Columbia Real Estate or generate 26.84% 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. Columbia Real Estate
Performance |
| Timeline |
| Franklin Real Estate |
| Columbia Real Estate |
Franklin Real and Columbia Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Columbia Real
The main advantage of trading using opposite Franklin Real and Columbia Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Columbia Real 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 Columbia Real will offset losses from the drop in Columbia Real'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 |
| Columbia Real vs. Fpa Queens Road | Columbia Real vs. Victory Rs Partners | Columbia Real vs. Amg River Road | Columbia Real vs. Ultramid Cap Profund Ultramid Cap |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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