Correlation Between Franklin Government and Hawaiian Tax-free
Can any of the company-specific risk be diversified away by investing in both Franklin Government and Hawaiian 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 Government and Hawaiian Tax-free 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 Hawaiian Tax Free Trust, you can compare the effects of market volatilities on Franklin Government and Hawaiian 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 Government with a short position of Hawaiian Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Government and Hawaiian Tax-free.
Diversification Opportunities for Franklin Government and Hawaiian Tax-free
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Hawaiian is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Hawaiian Tax Free Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Tax Free 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 Hawaiian 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 Hawaiian Tax Free has no effect on the direction of Franklin Government i.e., Franklin Government and Hawaiian Tax-free go up and down completely randomly.
Pair Corralation between Franklin Government and Hawaiian Tax-free
Assuming the 90 days horizon Franklin Government Money is expected to generate 0.87 times more return on investment than Hawaiian Tax-free. However, Franklin Government Money is 1.15 times less risky than Hawaiian Tax-free. It trades about 0.13 of its potential returns per unit of risk. Hawaiian Tax Free Trust is currently generating about 0.09 per unit of risk. If you would invest 96.00 in Franklin Government Money on September 4, 2024 and sell it today you would earn a total of 4.00 from holding Franklin Government Money or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Hawaiian Tax Free Trust
Performance |
| Timeline |
| Franklin Government Money |
| Hawaiian Tax Free |
Franklin Government and Hawaiian Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Government and Hawaiian Tax-free
The main advantage of trading using opposite Franklin Government and Hawaiian Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Government position performs unexpectedly, Hawaiian 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 Hawaiian Tax-free will offset losses from the drop in Hawaiian Tax-free's long position.| Franklin Government vs. Rbb Fund | Franklin Government vs. Issachar Fund Class | Franklin Government vs. Artisan Thematic Fund | Franklin Government vs. Vanguard Windsor Fund |
| Hawaiian Tax-free vs. Rationalpier 88 Convertible | Hawaiian Tax-free vs. Virtus Convertible | Hawaiian Tax-free vs. Allianzgi Convertible Income | Hawaiian Tax-free vs. Fidelity Sai Convertible |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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