Correlation Between Franklin Government and Pear Tree
Can any of the company-specific risk be diversified away by investing in both Franklin Government and Pear Tree 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 Pear Tree 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 Pear Tree Polaris, you can compare the effects of market volatilities on Franklin Government and Pear Tree 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 Pear Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Government and Pear Tree.
Diversification Opportunities for Franklin Government and Pear Tree
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Pear is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Pear Tree Polaris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Tree Polaris 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 Pear Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Tree Polaris has no effect on the direction of Franklin Government i.e., Franklin Government and Pear Tree go up and down completely randomly.
Pair Corralation between Franklin Government and Pear Tree
If you would invest 100.00 in Franklin Government Money on September 15, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Pear Tree Polaris
Performance |
| Timeline |
| Franklin Government Money |
| Pear Tree Polaris |
Franklin Government and Pear Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Government and Pear Tree
The main advantage of trading using opposite Franklin Government and Pear Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Government position performs unexpectedly, Pear Tree 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 Pear Tree will offset losses from the drop in Pear Tree's long position.| Franklin Government vs. Strategic Advisers Income | Franklin Government vs. Gmo High Yield | Franklin Government vs. Guggenheim High Yield | Franklin Government vs. Prudential High Yield |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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