Correlation Between Franklin Natural and Blackrock Global
Can any of the company-specific risk be diversified away by investing in both Franklin Natural and Blackrock Global 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 Natural and Blackrock Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Natural Resources and Blackrock Global Lng, you can compare the effects of market volatilities on Franklin Natural and Blackrock Global 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 Natural with a short position of Blackrock Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Natural and Blackrock Global.
Diversification Opportunities for Franklin Natural and Blackrock Global
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Blackrock is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Natural Resources and Blackrock Global Lng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Global Lng and Franklin Natural 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 Natural Resources are associated (or correlated) with Blackrock Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Global Lng has no effect on the direction of Franklin Natural i.e., Franklin Natural and Blackrock Global go up and down completely randomly.
Pair Corralation between Franklin Natural and Blackrock Global
Assuming the 90 days horizon Franklin Natural is expected to generate 1.65 times less return on investment than Blackrock Global. In addition to that, Franklin Natural is 2.48 times more volatile than Blackrock Global Lng. It trades about 0.04 of its total potential returns per unit of risk. Blackrock Global Lng is currently generating about 0.18 per unit of volatility. If you would invest 963.00 in Blackrock Global Lng on August 31, 2024 and sell it today you would earn a total of 310.00 from holding Blackrock Global Lng or generate 32.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Franklin Natural Resources vs. Blackrock Global Lng
Performance |
| Timeline |
| Franklin Natural Res |
| Blackrock Global Lng |
Franklin Natural and Blackrock Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Natural and Blackrock Global
The main advantage of trading using opposite Franklin Natural and Blackrock Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Natural position performs unexpectedly, Blackrock Global 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 Blackrock Global will offset losses from the drop in Blackrock Global's long position.| Franklin Natural vs. Lord Abbett Government | Franklin Natural vs. Government Securities Fund | Franklin Natural vs. Us Government Securities | Franklin Natural vs. Aig Government Money |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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