Correlation Between Franklin Natural and Thrivent Government
Can any of the company-specific risk be diversified away by investing in both Franklin Natural and Thrivent Government 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 Thrivent Government 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 Thrivent Government Bond, you can compare the effects of market volatilities on Franklin Natural and Thrivent Government 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 Thrivent Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Natural and Thrivent Government.
Diversification Opportunities for Franklin Natural and Thrivent Government
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Thrivent is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Natural Resources and Thrivent Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Government Bond 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 Thrivent Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Government Bond has no effect on the direction of Franklin Natural i.e., Franklin Natural and Thrivent Government go up and down completely randomly.
Pair Corralation between Franklin Natural and Thrivent Government
Assuming the 90 days horizon Franklin Natural Resources is expected to generate 2.9 times more return on investment than Thrivent Government. However, Franklin Natural is 2.9 times more volatile than Thrivent Government Bond. It trades about 0.03 of its potential returns per unit of risk. Thrivent Government Bond is currently generating about 0.04 per unit of risk. If you would invest 2,860 in Franklin Natural Resources on September 12, 2024 and sell it today you would earn a total of 193.00 from holding Franklin Natural Resources or generate 6.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Franklin Natural Resources vs. Thrivent Government Bond
Performance |
| Timeline |
| Franklin Natural Res |
| Thrivent Government Bond |
Franklin Natural and Thrivent Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Natural and Thrivent Government
The main advantage of trading using opposite Franklin Natural and Thrivent Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Natural position performs unexpectedly, Thrivent Government 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 Thrivent Government will offset losses from the drop in Thrivent Government's long position.| Franklin Natural vs. Vanguard Financials Index | Franklin Natural vs. Prudential Jennison Financial | Franklin Natural vs. John Hancock Financial | Franklin Natural vs. Mesirow Financial Small |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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