Correlation Between Franklin California and Blue Current
Can any of the company-specific risk be diversified away by investing in both Franklin California and Blue Current 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 California and Blue Current into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin California Tax Free and Blue Current Global, you can compare the effects of market volatilities on Franklin California and Blue Current 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 California with a short position of Blue Current. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin California and Blue Current.
Diversification Opportunities for Franklin California and Blue Current
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Blue is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Franklin California Tax Free and Blue Current Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Current Global and Franklin California 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 California Tax Free are associated (or correlated) with Blue Current. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Current Global has no effect on the direction of Franklin California i.e., Franklin California and Blue Current go up and down completely randomly.
Pair Corralation between Franklin California and Blue Current
Assuming the 90 days horizon Franklin California Tax Free is expected to generate 0.55 times more return on investment than Blue Current. However, Franklin California Tax Free is 1.8 times less risky than Blue Current. It trades about -0.05 of its potential returns per unit of risk. Blue Current Global is currently generating about -0.03 per unit of risk. If you would invest 697.00 in Franklin California Tax Free on August 29, 2024 and sell it today you would lose (5.00) from holding Franklin California Tax Free or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin California Tax Free vs. Blue Current Global
Performance |
| Timeline |
| Franklin California Tax |
| Blue Current Global |
Franklin California and Blue Current Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin California and Blue Current
The main advantage of trading using opposite Franklin California and Blue Current positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin California position performs unexpectedly, Blue Current 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 Blue Current will offset losses from the drop in Blue Current's long position.| Franklin California vs. Scharf Global Opportunity | Franklin California vs. Ab Global Bond | Franklin California vs. Blue Current Global | Franklin California vs. Ab Global Risk |
| Blue Current vs. Franklin Mutual Global | Blue Current vs. Franklin Mutual Global | Blue Current vs. Franklin Mutual Global |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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