Correlation Between Franklin Natural and Mainstay Common
Can any of the company-specific risk be diversified away by investing in both Franklin Natural and Mainstay Common 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 Mainstay Common 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 Mainstay Mon Stock, you can compare the effects of market volatilities on Franklin Natural and Mainstay Common 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 Mainstay Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Natural and Mainstay Common.
Diversification Opportunities for Franklin Natural and Mainstay Common
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Mainstay is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Natural Resources and Mainstay Mon Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Mon Stock 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 Mainstay Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Mon Stock has no effect on the direction of Franklin Natural i.e., Franklin Natural and Mainstay Common go up and down completely randomly.
Pair Corralation between Franklin Natural and Mainstay Common
Assuming the 90 days horizon Franklin Natural is expected to generate 1.59 times less return on investment than Mainstay Common. In addition to that, Franklin Natural is 1.38 times more volatile than Mainstay Mon Stock. It trades about 0.06 of its total potential returns per unit of risk. Mainstay Mon Stock is currently generating about 0.13 per unit of volatility. If you would invest 3,325 in Mainstay Mon Stock on September 4, 2024 and sell it today you would earn a total of 908.00 from holding Mainstay Mon Stock or generate 27.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Natural Resources vs. Mainstay Mon Stock
Performance |
| Timeline |
| Franklin Natural Res |
| Mainstay Mon Stock |
Franklin Natural and Mainstay Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Natural and Mainstay Common
The main advantage of trading using opposite Franklin Natural and Mainstay Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Natural position performs unexpectedly, Mainstay Common 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 Mainstay Common will offset losses from the drop in Mainstay Common'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 |
| Mainstay Common vs. Great West Goldman Sachs | Mainstay Common vs. Precious Metals And | Mainstay Common vs. International Investors Gold | Mainstay Common vs. First Eagle Gold |
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.
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