Correlation Between Franklin Natural and Hartford Growth
Can any of the company-specific risk be diversified away by investing in both Franklin Natural and Hartford Growth 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 Hartford Growth 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 The Hartford Growth, you can compare the effects of market volatilities on Franklin Natural and Hartford Growth 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 Hartford Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Natural and Hartford Growth.
Diversification Opportunities for Franklin Natural and Hartford Growth
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Hartford is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Natural Resources and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth 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 Hartford Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth has no effect on the direction of Franklin Natural i.e., Franklin Natural and Hartford Growth go up and down completely randomly.
Pair Corralation between Franklin Natural and Hartford Growth
Assuming the 90 days horizon Franklin Natural Resources is expected to generate 0.43 times more return on investment than Hartford Growth. However, Franklin Natural Resources is 2.3 times less risky than Hartford Growth. It trades about 1.01 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.02 per unit of risk. If you would invest 2,809 in Franklin Natural Resources on October 24, 2024 and sell it today you would earn a total of 273.00 from holding Franklin Natural Resources or generate 9.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Natural Resources vs. The Hartford Growth
Performance |
| Timeline |
| Franklin Natural Res |
| Hartford Growth |
Franklin Natural and Hartford Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Natural and Hartford Growth
The main advantage of trading using opposite Franklin Natural and Hartford Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Natural position performs unexpectedly, Hartford Growth 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 Hartford Growth will offset losses from the drop in Hartford Growth's long position.| Franklin Natural vs. Aig Government Money | Franklin Natural vs. Blackrock Exchange Portfolio | Franklin Natural vs. Schwab Government Money | Franklin Natural vs. Lord Abbett Emerging |
| Hartford Growth vs. Advisory Research Mlp | Hartford Growth vs. Blackrock All Cap Energy | Hartford Growth vs. Franklin Natural Resources | Hartford Growth vs. Transamerica Mlp Energy |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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