Correlation Between Franklin Natural and Clearbridge Small
Can any of the company-specific risk be diversified away by investing in both Franklin Natural and Clearbridge Small 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 Clearbridge Small 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 Clearbridge Small Cap, you can compare the effects of market volatilities on Franklin Natural and Clearbridge Small 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 Clearbridge Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Natural and Clearbridge Small.
Diversification Opportunities for Franklin Natural and Clearbridge Small
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Clearbridge is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Natural Resources and Clearbridge Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Small 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 Clearbridge Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Small Cap has no effect on the direction of Franklin Natural i.e., Franklin Natural and Clearbridge Small go up and down completely randomly.
Pair Corralation between Franklin Natural and Clearbridge Small
If you would invest 2,891 in Franklin Natural Resources on November 2, 2024 and sell it today you would earn a total of 107.00 from holding Franklin Natural Resources or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Franklin Natural Resources vs. Clearbridge Small Cap
Performance |
| Timeline |
| Franklin Natural Res |
| Clearbridge Small Cap |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Franklin Natural and Clearbridge Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Natural and Clearbridge Small
The main advantage of trading using opposite Franklin Natural and Clearbridge Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Natural position performs unexpectedly, Clearbridge Small 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 Clearbridge Small will offset losses from the drop in Clearbridge Small's long position.| Franklin Natural vs. Ab Global Bond | Franklin Natural vs. Franklin Government Money | Franklin Natural vs. Bbh Intermediate Municipal | Franklin Natural vs. Flexible Bond Portfolio |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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