Correlation Between Franklin Government and Aquila Tax
Can any of the company-specific risk be diversified away by investing in both Franklin Government and Aquila Tax 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 Aquila Tax 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 Aquila Tax Free Trust, you can compare the effects of market volatilities on Franklin Government and Aquila Tax 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 Aquila Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Government and Aquila Tax.
Diversification Opportunities for Franklin Government and Aquila Tax
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Aquila is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money 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 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 Aquila Tax. 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 Government i.e., Franklin Government and Aquila Tax go up and down completely randomly.
Pair Corralation between Franklin Government and Aquila Tax
Assuming the 90 days horizon Franklin Government Money is expected to generate 1.1 times more return on investment than Aquila Tax. However, Franklin Government is 1.1 times more volatile than Aquila Tax Free Trust. It trades about 0.13 of its potential returns per unit of risk. Aquila Tax Free Trust is currently generating about 0.02 per unit of risk. If you would invest 96.00 in Franklin Government Money on September 12, 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 Together |
| Strength | Very Weak |
| Accuracy | 59.92% |
| Values | Daily Returns |
Franklin Government Money vs. Aquila Tax Free Trust
Performance |
| Timeline |
| Franklin Government Money |
| Aquila Tax Free |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Franklin Government and Aquila Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Government and Aquila Tax
The main advantage of trading using opposite Franklin Government and Aquila Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Government position performs unexpectedly, Aquila Tax 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 will offset losses from the drop in Aquila Tax's long position.| Franklin Government vs. Buffalo High Yield | Franklin Government vs. Fidelity Capital Income | Franklin Government vs. T Rowe Price | Franklin Government vs. Prudential High Yield |
| Aquila Tax vs. Chestnut Street Exchange | Aquila Tax vs. Matson Money Equity | Aquila Tax vs. Aig Government Money | Aquila Tax vs. Franklin Government Money |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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