Correlation Between Franklin Natural and Global Real
Can any of the company-specific risk be diversified away by investing in both Franklin Natural and Global Real 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 Global Real 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 Global Real Estate, you can compare the effects of market volatilities on Franklin Natural and Global Real 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 Global Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Natural and Global Real.
Diversification Opportunities for Franklin Natural and Global Real
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FRANKLIN and Global is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Natural Resources and Global Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Real Estate 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 Global Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Real Estate has no effect on the direction of Franklin Natural i.e., Franklin Natural and Global Real go up and down completely randomly.
Pair Corralation between Franklin Natural and Global Real
Assuming the 90 days horizon Franklin Natural is expected to generate 1.67 times less return on investment than Global Real. In addition to that, Franklin Natural is 1.1 times more volatile than Global Real Estate. It trades about 0.06 of its total potential returns per unit of risk. Global Real Estate is currently generating about 0.1 per unit of volatility. If you would invest 2,176 in Global Real Estate on August 25, 2024 and sell it today you would earn a total of 620.00 from holding Global Real Estate or generate 28.49% 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. Global Real Estate
Performance |
| Timeline |
| Franklin Natural Res |
| Global Real Estate |
Franklin Natural and Global Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Natural and Global Real
The main advantage of trading using opposite Franklin Natural and Global Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Natural position performs unexpectedly, Global Real 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 Global Real will offset losses from the drop in Global Real's long position.| Franklin Natural vs. Dreyfus Institutional Reserves | Franklin Natural vs. Pioneer Money Market | Franklin Natural vs. Ubs Money Series | Franklin Natural vs. Massmutual Premier Funds |
| Global Real vs. Gmo Resources | Global Real vs. Franklin Natural Resources | Global Real vs. Jennison Natural Resources | Global Real vs. Alpsalerian Energy Infrastructure |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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