Correlation Between Franklin and Payden Absolute
Can any of the company-specific risk be diversified away by investing in both Franklin and Payden Absolute 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 Payden Absolute 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 Payden Absolute Return, you can compare the effects of market volatilities on Franklin and Payden Absolute 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 Payden Absolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Payden Absolute.
Diversification Opportunities for Franklin and Payden Absolute
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Payden is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Payden Absolute Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Absolute 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 Payden Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Absolute Return has no effect on the direction of Franklin i.e., Franklin and Payden Absolute go up and down completely randomly.
Pair Corralation between Franklin and Payden Absolute
If you would invest 100.00 in Franklin Government Money on September 2, 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Payden Absolute Return
Performance |
| Timeline |
| Franklin Government Money |
| Payden Absolute Return |
Franklin and Payden Absolute Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin and Payden Absolute
The main advantage of trading using opposite Franklin and Payden Absolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin position performs unexpectedly, Payden Absolute 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 Payden Absolute will offset losses from the drop in Payden Absolute's long position.| Franklin vs. Vanguard Total Stock | Franklin vs. Vanguard 500 Index | Franklin vs. Vanguard Total Stock | Franklin vs. Vanguard Total Stock |
| Payden Absolute vs. Dunham Porategovernment Bond | Payden Absolute vs. Franklin Government Money | Payden Absolute vs. Ab Government Exchange | Payden Absolute vs. Fidelity Series Government |
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 Stocks Directory module to find actively traded stocks across global markets.
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