Correlation Between Franklin Natural and Via Renewables
Can any of the company-specific risk be diversified away by investing in both Franklin Natural and Via Renewables 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 Via Renewables 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 Via Renewables, you can compare the effects of market volatilities on Franklin Natural and Via Renewables 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 Via Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Natural and Via Renewables.
Diversification Opportunities for Franklin Natural and Via Renewables
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Via is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Natural Resources and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Franklin Natural i.e., Franklin Natural and Via Renewables go up and down completely randomly.
Pair Corralation between Franklin Natural and Via Renewables
Assuming the 90 days horizon Franklin Natural Resources is expected to under-perform the Via Renewables. In addition to that, Franklin Natural is 1.53 times more volatile than Via Renewables. It trades about -0.01 of its total potential returns per unit of risk. Via Renewables is currently generating about 0.03 per unit of volatility. If you would invest 2,314 in Via Renewables on November 27, 2024 and sell it today you would earn a total of 8.00 from holding Via Renewables or generate 0.35% 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. Via Renewables
Performance |
| Timeline |
| Franklin Natural Res |
| Via Renewables |
Franklin Natural and Via Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Natural and Via Renewables
The main advantage of trading using opposite Franklin Natural and Via Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Natural position performs unexpectedly, Via Renewables 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 Via Renewables will offset losses from the drop in Via Renewables' long position.| Franklin Natural vs. Virtus High Yield | Franklin Natural vs. Barings High Yield | Franklin Natural vs. Access Flex High | Franklin Natural vs. Msift High Yield |
| Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings Corp |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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