Correlation Between Franklin Government and Jensen Quality
Can any of the company-specific risk be diversified away by investing in both Franklin Government and Jensen Quality 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 Jensen Quality 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 Jensen Quality Value, you can compare the effects of market volatilities on Franklin Government and Jensen Quality 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 Jensen Quality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Government and Jensen Quality.
Diversification Opportunities for Franklin Government and Jensen Quality
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and Jensen is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Jensen Quality Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Quality Value 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 Jensen Quality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Quality Value has no effect on the direction of Franklin Government i.e., Franklin Government and Jensen Quality go up and down completely randomly.
Pair Corralation between Franklin Government and Jensen Quality
If you would invest 100.00 in Franklin Government Money on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Franklin Government Money or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Government Money vs. Jensen Quality Value
Performance |
| Timeline |
| Franklin Government Money |
| Jensen Quality Value |
Franklin Government and Jensen Quality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Government and Jensen Quality
The main advantage of trading using opposite Franklin Government and Jensen Quality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Government position performs unexpectedly, Jensen Quality 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 Jensen Quality will offset losses from the drop in Jensen Quality's long position.| Franklin Government vs. Jpmorgan High Yield | Franklin Government vs. Janus High Yield Fund | Franklin Government vs. Gmo High Yield | Franklin Government vs. Guggenheim High Yield |
| Jensen Quality vs. Blackrock Health Sciences | Jensen Quality vs. Baillie Gifford Health | Jensen Quality vs. Alger Health Sciences | Jensen Quality vs. Live Oak Health |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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