Correlation Between Franklin Natural and Harbor Mid
Can any of the company-specific risk be diversified away by investing in both Franklin Natural and Harbor Mid 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 Harbor Mid 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 Harbor Mid Cap, you can compare the effects of market volatilities on Franklin Natural and Harbor Mid 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 Harbor Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Natural and Harbor Mid.
Diversification Opportunities for Franklin Natural and Harbor Mid
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Harbor is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Natural Resources and Harbor Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Mid Cap 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 Harbor Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Mid Cap has no effect on the direction of Franklin Natural i.e., Franklin Natural and Harbor Mid go up and down completely randomly.
Pair Corralation between Franklin Natural and Harbor Mid
Assuming the 90 days horizon Franklin Natural is expected to generate 3.09 times less return on investment than Harbor Mid. But when comparing it to its historical volatility, Franklin Natural Resources is 1.19 times less risky than Harbor Mid. It trades about 0.04 of its potential returns per unit of risk. Harbor Mid Cap is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 479.00 in Harbor Mid Cap on September 4, 2024 and sell it today you would earn a total of 191.00 from holding Harbor Mid Cap or generate 39.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.66% |
| Values | Daily Returns |
Franklin Natural Resources vs. Harbor Mid Cap
Performance |
| Timeline |
| Franklin Natural Res |
| Harbor Mid Cap |
Franklin Natural and Harbor Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Natural and Harbor Mid
The main advantage of trading using opposite Franklin Natural and Harbor Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Natural position performs unexpectedly, Harbor Mid 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 Harbor Mid will offset losses from the drop in Harbor Mid's long position.| Franklin Natural vs. Qs Large Cap | Franklin Natural vs. Western Asset Municipal | Franklin Natural vs. T Rowe Price | Franklin Natural vs. Arrow Managed Futures |
| Harbor Mid vs. Morgan Stanley Emerging | Harbor Mid vs. Templeton Developing Markets | Harbor Mid vs. Massmutual Select Diversified | Harbor Mid vs. Rbc Emerging Markets |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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