Correlation Between Franklin Strategic and Pimco International
Can any of the company-specific risk be diversified away by investing in both Franklin Strategic and Pimco International 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 Pimco International 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 Pimco International Stocksplus, you can compare the effects of market volatilities on Franklin Strategic and Pimco International 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 Pimco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Strategic and Pimco International.
Diversification Opportunities for Franklin Strategic and Pimco International
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Pimco is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Strategic Mortgage and Pimco International Stocksplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco International 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 Pimco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco International has no effect on the direction of Franklin Strategic i.e., Franklin Strategic and Pimco International go up and down completely randomly.
Pair Corralation between Franklin Strategic and Pimco International
Assuming the 90 days horizon Franklin Strategic is expected to generate 10.99 times less return on investment than Pimco International. But when comparing it to its historical volatility, Franklin Strategic Mortgage is 1.54 times less risky than Pimco International. It trades about 0.06 of its potential returns per unit of risk. Pimco International Stocksplus is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 846.00 in Pimco International Stocksplus on November 5, 2024 and sell it today you would earn a total of 38.00 from holding Pimco International Stocksplus or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Strategic Mortgage vs. Pimco International Stocksplus
Performance |
| Timeline |
| Franklin Strategic |
| Pimco International |
Franklin Strategic and Pimco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Strategic and Pimco International
The main advantage of trading using opposite Franklin Strategic and Pimco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Strategic position performs unexpectedly, Pimco International 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 Pimco International will offset losses from the drop in Pimco International'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 |
| Pimco International vs. Pimco Small Cap | Pimco International vs. Fundamental Indexplus Tr | Pimco International vs. Stocksplus Total Return | Pimco International vs. Allianzgi Nfj Mid 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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