Correlation Between Franklin Government and Jpmorgan Core
Can any of the company-specific risk be diversified away by investing in both Franklin Government and Jpmorgan Core 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 Jpmorgan Core 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 Jpmorgan E Bond, you can compare the effects of market volatilities on Franklin Government and Jpmorgan Core 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 Jpmorgan Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Government and Jpmorgan Core.
Diversification Opportunities for Franklin Government and Jpmorgan Core
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Jpmorgan is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Jpmorgan E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan E Bond 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 Jpmorgan Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan E Bond has no effect on the direction of Franklin Government i.e., Franklin Government and Jpmorgan Core go up and down completely randomly.
Pair Corralation between Franklin Government and Jpmorgan Core
Assuming the 90 days horizon Franklin Government is expected to generate 2.24 times less return on investment than Jpmorgan Core. But when comparing it to its historical volatility, Franklin Government Money is 2.74 times less risky than Jpmorgan Core. It trades about 0.12 of its potential returns per unit of risk. Jpmorgan E Bond is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 986.00 in Jpmorgan E Bond on September 3, 2024 and sell it today you would earn a total of 45.00 from holding Jpmorgan E Bond or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Jpmorgan E Bond
Performance |
| Timeline |
| Franklin Government Money |
| Jpmorgan E Bond |
Franklin Government and Jpmorgan Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Government and Jpmorgan Core
The main advantage of trading using opposite Franklin Government and Jpmorgan Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Government position performs unexpectedly, Jpmorgan Core 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 Jpmorgan Core will offset losses from the drop in Jpmorgan Core's long position.| Franklin Government vs. Vanguard Total Stock | Franklin Government vs. Vanguard 500 Index | Franklin Government vs. Vanguard Total Stock | Franklin Government vs. Vanguard Total Stock |
| Jpmorgan Core vs. Gamco Global Telecommunications | Jpmorgan Core vs. Alliancebernstein National Municipal | Jpmorgan Core vs. Ishares Municipal Bond | Jpmorgan Core vs. Lind Capital Partners |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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