Correlation Between Franklin Templeton and RiverNorthDoubleLine
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and RiverNorthDoubleLine 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 Templeton and RiverNorthDoubleLine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton Limited and RiverNorthDoubleLine Strategic Opportunity, you can compare the effects of market volatilities on Franklin Templeton and RiverNorthDoubleLine 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 Templeton with a short position of RiverNorthDoubleLine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and RiverNorthDoubleLine.
Diversification Opportunities for Franklin Templeton and RiverNorthDoubleLine
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and RiverNorthDoubleLine is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Limited and RiverNorthDoubleLine Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiverNorthDoubleLine and Franklin Templeton 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 Templeton Limited are associated (or correlated) with RiverNorthDoubleLine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiverNorthDoubleLine has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and RiverNorthDoubleLine go up and down completely randomly.
Pair Corralation between Franklin Templeton and RiverNorthDoubleLine
Considering the 90-day investment horizon Franklin Templeton Limited is expected to generate 0.81 times more return on investment than RiverNorthDoubleLine. However, Franklin Templeton Limited is 1.23 times less risky than RiverNorthDoubleLine. It trades about 0.16 of its potential returns per unit of risk. RiverNorthDoubleLine Strategic Opportunity is currently generating about -0.14 per unit of risk. If you would invest 645.00 in Franklin Templeton Limited on August 29, 2024 and sell it today you would earn a total of 12.00 from holding Franklin Templeton Limited or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton Limited vs. RiverNorthDoubleLine Strategic
Performance |
| Timeline |
| Franklin Templeton |
| RiverNorthDoubleLine |
Franklin Templeton and RiverNorthDoubleLine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and RiverNorthDoubleLine
The main advantage of trading using opposite Franklin Templeton and RiverNorthDoubleLine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, RiverNorthDoubleLine 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 RiverNorthDoubleLine will offset losses from the drop in RiverNorthDoubleLine's long position.| Franklin Templeton vs. Eaton Vance National | Franklin Templeton vs. Invesco High Income | Franklin Templeton vs. Blackrock Muniholdings Ny | Franklin Templeton vs. Nuveen California Select |
| RiverNorthDoubleLine vs. Eaton Vance National | RiverNorthDoubleLine vs. Invesco High Income | RiverNorthDoubleLine vs. Blackrock Muniholdings Ny | RiverNorthDoubleLine vs. Nuveen California Select |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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