Correlation Between Franklin Government and Money Market
Can any of the company-specific risk be diversified away by investing in both Franklin Government and Money Market 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 Money Market 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 Money Market Obligations, you can compare the effects of market volatilities on Franklin Government and Money Market 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 Money Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Government and Money Market.
Diversification Opportunities for Franklin Government and Money Market
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Money is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Money Market Obligations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Money Market Obligations 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 Money Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Money Market Obligations has no effect on the direction of Franklin Government i.e., Franklin Government and Money Market go up and down completely randomly.
Pair Corralation between Franklin Government and Money Market
If you would invest 100.00 in Money Market Obligations on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Money Market Obligations or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Money Market Obligations
Performance |
| Timeline |
| Franklin Government Money |
| Money Market Obligations |
Franklin Government and Money Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Government and Money Market
The main advantage of trading using opposite Franklin Government and Money Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Government position performs unexpectedly, Money Market 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 Money Market will offset losses from the drop in Money Market's long position.| Franklin Government vs. Cmg Ultra Short | Franklin Government vs. Virtus Multi Sector Short | Franklin Government vs. Prudential Short Duration | Franklin Government vs. Siit Ultra Short |
| Money Market vs. Vanguard Total Stock | Money Market vs. Vanguard 500 Index | Money Market vs. Vanguard Total Stock | Money Market vs. Vanguard Total Stock |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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