Correlation Between Franklin Oregon and Aquila Tax-free
Can any of the company-specific risk be diversified away by investing in both Franklin Oregon and Aquila Tax-free 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 Oregon and Aquila Tax-free into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Oregon Tax Free and Aquila Tax Free Trust, you can compare the effects of market volatilities on Franklin Oregon and Aquila Tax-free 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 Oregon with a short position of Aquila Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Oregon and Aquila Tax-free.
Diversification Opportunities for Franklin Oregon and Aquila Tax-free
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Aquila is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Oregon Tax Free and Aquila Tax Free Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquila Tax Free and Franklin Oregon 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 Oregon Tax Free are associated (or correlated) with Aquila Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquila Tax Free has no effect on the direction of Franklin Oregon i.e., Franklin Oregon and Aquila Tax-free go up and down completely randomly.
Pair Corralation between Franklin Oregon and Aquila Tax-free
Assuming the 90 days horizon Franklin Oregon Tax Free is expected to generate 1.28 times more return on investment than Aquila Tax-free. However, Franklin Oregon is 1.28 times more volatile than Aquila Tax Free Trust. It trades about 0.19 of its potential returns per unit of risk. Aquila Tax Free Trust is currently generating about 0.17 per unit of risk. If you would invest 1,048 in Franklin Oregon Tax Free on September 2, 2024 and sell it today you would earn a total of 13.00 from holding Franklin Oregon Tax Free or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Oregon Tax Free vs. Aquila Tax Free Trust
Performance |
| Timeline |
| Franklin Oregon Tax |
| Aquila Tax Free |
Franklin Oregon and Aquila Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Oregon and Aquila Tax-free
The main advantage of trading using opposite Franklin Oregon and Aquila Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Oregon position performs unexpectedly, Aquila Tax-free 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 Aquila Tax-free will offset losses from the drop in Aquila Tax-free's long position.| Franklin Oregon vs. Franklin Mutual Beacon | Franklin Oregon vs. Templeton Developing Markets | Franklin Oregon vs. Franklin Mutual Global | Franklin Oregon vs. Franklin Mutual Global |
| Aquila Tax-free vs. Aquila Three Peaks | Aquila Tax-free vs. Aquila Three Peaks | Aquila Tax-free vs. Aquila Three Peaks | Aquila Tax-free vs. Aquila Three Peaks |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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