Correlation Between Franklin Strategic and SPACE
Can any of the company-specific risk be diversified away by investing in both Franklin Strategic and SPACE 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 SPACE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Strategic Mortgage and SPACE, you can compare the effects of market volatilities on Franklin Strategic and SPACE 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 SPACE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Strategic and SPACE.
Diversification Opportunities for Franklin Strategic and SPACE
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and SPACE is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Strategic Mortgage and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE 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 Mortgage are associated (or correlated) with SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of Franklin Strategic i.e., Franklin Strategic and SPACE go up and down completely randomly.
Pair Corralation between Franklin Strategic and SPACE
Assuming the 90 days horizon Franklin Strategic Mortgage is expected to generate 0.07 times more return on investment than SPACE. However, Franklin Strategic Mortgage is 14.62 times less risky than SPACE. It trades about 0.04 of its potential returns per unit of risk. SPACE is currently generating about -0.21 per unit of risk. If you would invest 765.00 in Franklin Strategic Mortgage on November 4, 2024 and sell it today you would earn a total of 2.00 from holding Franklin Strategic Mortgage or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Franklin Strategic Mortgage vs. SPACE
Performance |
| Timeline |
| Franklin Strategic |
| SPACE |
Franklin Strategic and SPACE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Strategic and SPACE
The main advantage of trading using opposite Franklin Strategic and SPACE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Strategic position performs unexpectedly, SPACE 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 SPACE will offset losses from the drop in SPACE's long position.| Franklin Strategic vs. Avantis Large Cap | Franklin Strategic vs. Americafirst Large Cap | Franklin Strategic vs. Blackrock Large Cap | Franklin Strategic vs. Virtus Nfj 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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