Correlation Between Franklin Government and Strategic Bond
Can any of the company-specific risk be diversified away by investing in both Franklin Government and Strategic Bond 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 Strategic Bond 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 Strategic Bond Fund, you can compare the effects of market volatilities on Franklin Government and Strategic Bond 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 Strategic Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Government and Strategic Bond.
Diversification Opportunities for Franklin Government and Strategic Bond
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Strategic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Strategic Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic 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 Strategic Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Bond has no effect on the direction of Franklin Government i.e., Franklin Government and Strategic Bond go up and down completely randomly.
Pair Corralation between Franklin Government and Strategic Bond
If you would invest 890.00 in Strategic Bond Fund on October 21, 2024 and sell it today you would earn a total of 1.00 from holding Strategic Bond Fund or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Strategic Bond Fund
Performance |
| Timeline |
| Franklin Government Money |
| Strategic Bond |
Franklin Government and Strategic Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Government and Strategic Bond
The main advantage of trading using opposite Franklin Government and Strategic Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Government position performs unexpectedly, Strategic Bond 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 Strategic Bond will offset losses from the drop in Strategic Bond's long position.| Franklin Government vs. World Energy Fund | Franklin Government vs. Vanguard Energy Index | Franklin Government vs. Jennison Natural Resources | Franklin Government vs. Alpsalerian Energy Infrastructure |
| Strategic Bond vs. International Developed Markets | Strategic Bond vs. Global Real Estate | Strategic Bond vs. Global Real Estate | Strategic Bond vs. Global Real Estate |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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