Correlation Between Franklin Real and Virtus Real
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Virtus 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 Virtus 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 Virtus Real Estate, you can compare the effects of market volatilities on Franklin Real and Virtus 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 Virtus Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Virtus Real.
Diversification Opportunities for Franklin Real and Virtus Real
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Virtus is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Virtus Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus 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 Virtus Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Real Estate has no effect on the direction of Franklin Real i.e., Franklin Real and Virtus Real go up and down completely randomly.
Pair Corralation between Franklin Real and Virtus Real
Assuming the 90 days horizon Franklin Real is expected to generate 1.87 times less return on investment than Virtus Real. In addition to that, Franklin Real is 1.01 times more volatile than Virtus Real Estate. It trades about 0.03 of its total potential returns per unit of risk. Virtus Real Estate is currently generating about 0.05 per unit of volatility. If you would invest 1,726 in Virtus Real Estate on September 3, 2024 and sell it today you would earn a total of 466.00 from holding Virtus Real Estate or generate 27.0% 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. Virtus Real Estate
Performance |
| Timeline |
| Franklin Real Estate |
| Virtus Real Estate |
Franklin Real and Virtus Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Virtus Real
The main advantage of trading using opposite Franklin Real and Virtus Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Virtus 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 Virtus Real will offset losses from the drop in Virtus Real's long position.| Franklin Real vs. Vanguard Reit Index | Franklin Real vs. Vanguard Reit Index | Franklin Real vs. Vanguard Reit Index | Franklin Real vs. Dfa Real Estate |
| Virtus Real vs. Us Government Securities | Virtus Real vs. John Hancock Government | Virtus Real vs. Dunham Porategovernment Bond | Virtus Real vs. Fidelity Series Government |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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