Correlation Between Franklin Strategic and Columbia Dividend
Can any of the company-specific risk be diversified away by investing in both Franklin Strategic and Columbia Dividend 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 Columbia Dividend 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 Columbia Dividend Opportunity, you can compare the effects of market volatilities on Franklin Strategic and Columbia Dividend 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 Columbia Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Strategic and Columbia Dividend.
Diversification Opportunities for Franklin Strategic and Columbia Dividend
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Columbia is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Strategic Mortgage and Columbia Dividend Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Dividend 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 Columbia Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Dividend has no effect on the direction of Franklin Strategic i.e., Franklin Strategic and Columbia Dividend go up and down completely randomly.
Pair Corralation between Franklin Strategic and Columbia Dividend
Assuming the 90 days horizon Franklin Strategic is expected to generate 10.9 times less return on investment than Columbia Dividend. But when comparing it to its historical volatility, Franklin Strategic Mortgage is 1.97 times less risky than Columbia Dividend. It trades about 0.04 of its potential returns per unit of risk. Columbia Dividend Opportunity is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 3,817 in Columbia Dividend Opportunity on November 4, 2024 and sell it today you would earn a total of 113.00 from holding Columbia Dividend Opportunity or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Strategic Mortgage vs. Columbia Dividend Opportunity
Performance |
| Timeline |
| Franklin Strategic |
| Columbia Dividend |
Franklin Strategic and Columbia Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Strategic and Columbia Dividend
The main advantage of trading using opposite Franklin Strategic and Columbia Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Strategic position performs unexpectedly, Columbia Dividend 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 Columbia Dividend will offset losses from the drop in Columbia Dividend'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 |
| Columbia Dividend vs. Columbia Porate Income | Columbia Dividend vs. Columbia Ultra Short | Columbia Dividend vs. Columbia Treasury Index | Columbia Dividend vs. Multi Manager Directional Alternative |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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