Correlation Between Franklin California and Power Global
Can any of the company-specific risk be diversified away by investing in both Franklin California and Power Global 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 Power Global 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 Power Global Tactical, you can compare the effects of market volatilities on Franklin California and Power Global 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 Power Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin California and Power Global.
Diversification Opportunities for Franklin California and Power Global
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Power is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Franklin California Tax Free and Power Global Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Global Tactical 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 Power Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Global Tactical has no effect on the direction of Franklin California i.e., Franklin California and Power Global go up and down completely randomly.
Pair Corralation between Franklin California and Power Global
Assuming the 90 days horizon Franklin California is expected to generate 2.87 times less return on investment than Power Global. But when comparing it to its historical volatility, Franklin California Tax Free is 1.89 times less risky than Power Global. It trades about 0.06 of its potential returns per unit of risk. Power Global Tactical is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 877.00 in Power Global Tactical on November 27, 2024 and sell it today you would earn a total of 227.00 from holding Power Global Tactical or generate 25.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin California Tax Free vs. Power Global Tactical
Performance |
| Timeline |
| Franklin California Tax |
| Power Global Tactical |
Franklin California and Power Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin California and Power Global
The main advantage of trading using opposite Franklin California and Power Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin California position performs unexpectedly, Power Global 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 Power Global will offset losses from the drop in Power Global's long position.| Franklin California vs. Franklin Mutual Beacon | Franklin California vs. Templeton Developing Markets | Franklin California vs. Franklin Mutual Global | Franklin California vs. Franklin Mutual Global |
| Power Global vs. John Hancock Government | Power Global vs. Bbh Intermediate Municipal | Power Global vs. Ab Municipal Bond | Power Global vs. Us Government Securities |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |