Correlation Between Franklin Microcap and Perritt Microcap
Can any of the company-specific risk be diversified away by investing in both Franklin Microcap and Perritt Microcap 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 Microcap and Perritt Microcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FRANKLIN MICROCAP VALUE and Perritt Microcap Opportunities, you can compare the effects of market volatilities on Franklin Microcap and Perritt Microcap 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 Microcap with a short position of Perritt Microcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Microcap and Perritt Microcap.
Diversification Opportunities for Franklin Microcap and Perritt Microcap
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Perritt is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding FRANKLIN MICROCAP VALUE and Perritt Microcap Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perritt Microcap Opp and Franklin Microcap 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 MICROCAP VALUE are associated (or correlated) with Perritt Microcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perritt Microcap Opp has no effect on the direction of Franklin Microcap i.e., Franklin Microcap and Perritt Microcap go up and down completely randomly.
Pair Corralation between Franklin Microcap and Perritt Microcap
Assuming the 90 days horizon FRANKLIN MICROCAP VALUE is expected to generate 0.9 times more return on investment than Perritt Microcap. However, FRANKLIN MICROCAP VALUE is 1.12 times less risky than Perritt Microcap. It trades about 0.11 of its potential returns per unit of risk. Perritt Microcap Opportunities is currently generating about 0.01 per unit of risk. If you would invest 2,789 in FRANKLIN MICROCAP VALUE on September 1, 2024 and sell it today you would earn a total of 537.00 from holding FRANKLIN MICROCAP VALUE or generate 19.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FRANKLIN MICROCAP VALUE vs. Perritt Microcap Opportunities
Performance |
| Timeline |
| Franklin Microcap Value |
| Perritt Microcap Opp |
Franklin Microcap and Perritt Microcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Microcap and Perritt Microcap
The main advantage of trading using opposite Franklin Microcap and Perritt Microcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Microcap position performs unexpectedly, Perritt Microcap 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 Perritt Microcap will offset losses from the drop in Perritt Microcap's long position.| Franklin Microcap vs. Ab Select Longshort | Franklin Microcap vs. Maryland Short Term Tax Free | Franklin Microcap vs. Old Westbury Short Term | Franklin Microcap vs. Franklin Federal Limited Term |
| Perritt Microcap vs. Ultra Small Pany Market | Perritt Microcap vs. Oberweis Micro Cap Fund | Perritt Microcap vs. Victory Rs Value | Perritt Microcap vs. Sterling Capital Stratton |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Commodity Directory Find actively traded commodities issued by global exchanges |