Correlation Between Franklin Federal and Boston Partners
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Boston Partners 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 Boston Partners 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 Boston Partners Longshort, you can compare the effects of market volatilities on Franklin Federal and Boston Partners 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 Boston Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Boston Partners.
Diversification Opportunities for Franklin Federal and Boston Partners
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Boston is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Limited Term and Boston Partners Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Partners Longshort 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 Boston Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Partners Longshort has no effect on the direction of Franklin Federal i.e., Franklin Federal and Boston Partners go up and down completely randomly.
Pair Corralation between Franklin Federal and Boston Partners
Assuming the 90 days horizon Franklin Federal is expected to generate 1.84 times less return on investment than Boston Partners. But when comparing it to its historical volatility, Franklin Federal Limited Term is 5.84 times less risky than Boston Partners. It trades about 0.19 of its potential returns per unit of risk. Boston Partners Longshort is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,371 in Boston Partners Longshort on September 12, 2024 and sell it today you would earn a total of 167.00 from holding Boston Partners Longshort or generate 12.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Federal Limited Term vs. Boston Partners Longshort
Performance |
| Timeline |
| Franklin Federal Lim |
| Boston Partners Longshort |
Franklin Federal and Boston Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Boston Partners
The main advantage of trading using opposite Franklin Federal and Boston Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Boston Partners 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 Boston Partners will offset losses from the drop in Boston Partners' long position.| Franklin Federal vs. Vanguard Limited Term Tax Exempt | Franklin Federal vs. SCOR PK | Franklin Federal vs. Morningstar Unconstrained Allocation | Franklin Federal vs. Via Renewables |
| Boston Partners vs. Diamond Hill Long Short | Boston Partners vs. Pimco Rae Worldwide | Boston Partners vs. SCOR PK | Boston Partners vs. Morningstar Unconstrained Allocation |
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 CEOs Directory module to screen CEOs from public companies around the world.
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