Correlation Between Franklin Government and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Franklin Government and Eaton Vance 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 Government and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Government Money and Eaton Vance Worldwide, you can compare the effects of market volatilities on Franklin Government and Eaton Vance 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 Government with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Government and Eaton Vance.
Diversification Opportunities for Franklin Government and Eaton Vance
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Eaton is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Eaton Vance Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Worldwide and Franklin Government 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 Government Money are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Worldwide has no effect on the direction of Franklin Government i.e., Franklin Government and Eaton Vance go up and down completely randomly.
Pair Corralation between Franklin Government and Eaton Vance
Assuming the 90 days horizon Franklin Government Money is expected to generate 0.19 times more return on investment than Eaton Vance. However, Franklin Government Money is 5.36 times less risky than Eaton Vance. It trades about 0.13 of its potential returns per unit of risk. Eaton Vance Worldwide is currently generating about -0.17 per unit of risk. If you would invest 99.00 in Franklin Government Money on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Franklin Government Money or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Eaton Vance Worldwide
Performance |
| Timeline |
| Franklin Government Money |
| Eaton Vance Worldwide |
Franklin Government and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Government and Eaton Vance
The main advantage of trading using opposite Franklin Government and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Government position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.| Franklin Government vs. Vanguard Total Stock | Franklin Government vs. Vanguard 500 Index | Franklin Government vs. Vanguard Total Stock | Franklin Government vs. Vanguard Total Stock |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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