Correlation Between Franklin and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Franklin and Prudential Jennison 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 and Prudential Jennison 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 Prudential Jennison Emerging, you can compare the effects of market volatilities on Franklin and Prudential Jennison 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 with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Prudential Jennison.
Diversification Opportunities for Franklin and Prudential Jennison
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Prudential is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Prudential Jennison Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison and Franklin 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 Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison has no effect on the direction of Franklin i.e., Franklin and Prudential Jennison go up and down completely randomly.
Pair Corralation between Franklin and Prudential Jennison
If you would invest 100.00 in Franklin Government Money on August 30, 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Prudential Jennison Emerging
Performance |
| Timeline |
| Franklin Government Money |
| Prudential Jennison |
Franklin and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin and Prudential Jennison
The main advantage of trading using opposite Franklin and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin position performs unexpectedly, Prudential Jennison 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 Prudential Jennison will offset losses from the drop in Prudential Jennison's long position.| Franklin vs. Ab Municipal Bond | Franklin vs. Fidelity Sai Inflationfocused | Franklin vs. Goldman Sachs Inflation | Franklin vs. The Hartford Inflation |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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