Correlation Between Franklin and Ppm High
Can any of the company-specific risk be diversified away by investing in both Franklin and Ppm High 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 Ppm High 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 Ppm High Yield, you can compare the effects of market volatilities on Franklin and Ppm High 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 Ppm High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Ppm High.
Diversification Opportunities for Franklin and Ppm High
Poor diversification
The 3 months correlation between Franklin and Ppm is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Ppm High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ppm High Yield 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 Ppm High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ppm High Yield has no effect on the direction of Franklin i.e., Franklin and Ppm High go up and down completely randomly.
Pair Corralation between Franklin and Ppm High
Assuming the 90 days horizon Franklin is expected to generate 2.83 times less return on investment than Ppm High. But when comparing it to its historical volatility, Franklin Government Money is 1.52 times less risky than Ppm High. It trades about 0.13 of its potential returns per unit of risk. Ppm High Yield is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 849.00 in Ppm High Yield on August 26, 2024 and sell it today you would earn a total of 50.00 from holding Ppm High Yield or generate 5.89% 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. Ppm High Yield
Performance |
| Timeline |
| Franklin Government Money |
| Ppm High Yield |
Franklin and Ppm High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin and Ppm High
The main advantage of trading using opposite Franklin and Ppm High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin position performs unexpectedly, Ppm High 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 Ppm High will offset losses from the drop in Ppm High's long position.| Franklin vs. Lord Abbett Vertible | Franklin vs. Absolute Convertible Arbitrage | Franklin vs. Harbor Vertible Securities | Franklin vs. Allianzgi Convertible Income |
| Ppm High vs. T Rowe Price | Ppm High vs. Franklin Government Money | Ppm High vs. Massmutual Premier Funds | Ppm High vs. American Century California |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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