Correlation Between Franklin Federal and Baron Focused
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Baron Focused 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 Federal and Baron Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Federal Limited Term and Baron Focused Growth, you can compare the effects of market volatilities on Franklin Federal and Baron Focused 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 Federal with a short position of Baron Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Baron Focused.
Diversification Opportunities for Franklin Federal and Baron Focused
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Baron is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Limited Term and Baron Focused Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Focused Growth and Franklin Federal 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 Federal Limited Term are associated (or correlated) with Baron Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Focused Growth has no effect on the direction of Franklin Federal i.e., Franklin Federal and Baron Focused go up and down completely randomly.
Pair Corralation between Franklin Federal and Baron Focused
Assuming the 90 days horizon Franklin Federal is expected to generate 29.0 times less return on investment than Baron Focused. But when comparing it to its historical volatility, Franklin Federal Limited Term is 8.67 times less risky than Baron Focused. It trades about 0.15 of its potential returns per unit of risk. Baron Focused Growth is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 4,105 in Baron Focused Growth on September 1, 2024 and sell it today you would earn a total of 486.00 from holding Baron Focused Growth or generate 11.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Federal Limited Term vs. Baron Focused Growth
Performance |
| Timeline |
| Franklin Federal Lim |
| Baron Focused Growth |
Franklin Federal and Baron Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Baron Focused
The main advantage of trading using opposite Franklin Federal and Baron Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Baron Focused 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 Baron Focused will offset losses from the drop in Baron Focused's long position.| Franklin Federal vs. Small Midcap Dividend Income | Franklin Federal vs. Tax Managed Mid Small | Franklin Federal vs. Touchstone Small Cap | Franklin Federal vs. Jpmorgan Small Cap |
| Baron Focused vs. Precious Metals And | Baron Focused vs. Goldman Sachs Esg | Baron Focused vs. Gamco Global Gold | Baron Focused vs. Oppenheimer Gold Special |
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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