Correlation Between Franklin and Pimco Real
Can any of the company-specific risk be diversified away by investing in both Franklin and Pimco Real 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 Pimco Real 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 Pimco Real Return, you can compare the effects of market volatilities on Franklin and Pimco Real 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 Pimco Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Pimco Real.
Diversification Opportunities for Franklin and Pimco Real
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Pimco is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Pimco Real Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Real Return 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 Pimco Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Real Return has no effect on the direction of Franklin i.e., Franklin and Pimco Real go up and down completely randomly.
Pair Corralation between Franklin and Pimco Real
If you would invest 100.00 in Franklin Government Money on August 28, 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 Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Government Money vs. Pimco Real Return
Performance |
| Timeline |
| Franklin Government Money |
| Pimco Real Return |
Franklin and Pimco Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin and Pimco Real
The main advantage of trading using opposite Franklin and Pimco Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin position performs unexpectedly, Pimco Real 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 Pimco Real will offset losses from the drop in Pimco Real's long position.| Franklin vs. Vanguard Total Stock | Franklin vs. Vanguard 500 Index | Franklin vs. Vanguard Total Stock | Franklin vs. Vanguard Total Stock |
| Pimco Real vs. Legg Mason Partners | Pimco Real vs. Blackrock Funds Iii | Pimco Real vs. Franklin Government Money | Pimco Real vs. Institutional Fiduciary Trust |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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