Correlation Between Franklin Strategic and Clearbridge Appreciation
Can any of the company-specific risk be diversified away by investing in both Franklin Strategic and Clearbridge Appreciation 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 Strategic and Clearbridge Appreciation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Strategic Income and Clearbridge Appreciation Fund, you can compare the effects of market volatilities on Franklin Strategic and Clearbridge Appreciation 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 Strategic with a short position of Clearbridge Appreciation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Strategic and Clearbridge Appreciation.
Diversification Opportunities for Franklin Strategic and Clearbridge Appreciation
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Clearbridge is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Strategic Income and Clearbridge Appreciation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Appreciation and Franklin Strategic 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 Strategic Income are associated (or correlated) with Clearbridge Appreciation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Appreciation has no effect on the direction of Franklin Strategic i.e., Franklin Strategic and Clearbridge Appreciation go up and down completely randomly.
Pair Corralation between Franklin Strategic and Clearbridge Appreciation
Assuming the 90 days horizon Franklin Strategic is expected to generate 3.17 times less return on investment than Clearbridge Appreciation. But when comparing it to its historical volatility, Franklin Strategic Income is 3.69 times less risky than Clearbridge Appreciation. It trades about 0.15 of its potential returns per unit of risk. Clearbridge Appreciation Fund is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,407 in Clearbridge Appreciation Fund on August 29, 2024 and sell it today you would earn a total of 424.00 from holding Clearbridge Appreciation Fund or generate 12.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Strategic Income vs. Clearbridge Appreciation Fund
Performance |
| Timeline |
| Franklin Strategic Income |
| Clearbridge Appreciation |
Franklin Strategic and Clearbridge Appreciation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Strategic and Clearbridge Appreciation
The main advantage of trading using opposite Franklin Strategic and Clearbridge Appreciation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Strategic position performs unexpectedly, Clearbridge Appreciation 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 Clearbridge Appreciation will offset losses from the drop in Clearbridge Appreciation's long position.| Franklin Strategic vs. Artisan High Income | Franklin Strategic vs. Rbc Ultra Short Fixed | Franklin Strategic vs. Ambrus Core Bond | Franklin Strategic vs. Icon Bond Fund |
| Clearbridge Appreciation vs. Virtus Nfj Large Cap | Clearbridge Appreciation vs. Qs Large Cap | Clearbridge Appreciation vs. Fundamental Large Cap | Clearbridge Appreciation vs. Qs Large Cap |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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