Correlation Between Franklin Federal and Calamos Timpani
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Calamos Timpani 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 Calamos Timpani 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 Calamos Timpani Small, you can compare the effects of market volatilities on Franklin Federal and Calamos Timpani 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 Calamos Timpani. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Calamos Timpani.
Diversification Opportunities for Franklin Federal and Calamos Timpani
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Calamos is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Limited Term and Calamos Timpani Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Timpani Small 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 Calamos Timpani. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Timpani Small has no effect on the direction of Franklin Federal i.e., Franklin Federal and Calamos Timpani go up and down completely randomly.
Pair Corralation between Franklin Federal and Calamos Timpani
Assuming the 90 days horizon Franklin Federal Limited Term is expected to generate 0.06 times more return on investment than Calamos Timpani. However, Franklin Federal Limited Term is 15.98 times less risky than Calamos Timpani. It trades about -0.31 of its potential returns per unit of risk. Calamos Timpani Small is currently generating about -0.25 per unit of risk. If you would invest 1,035 in Franklin Federal Limited Term on October 7, 2024 and sell it today you would lose (7.00) from holding Franklin Federal Limited Term or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Federal Limited Term vs. Calamos Timpani Small
Performance |
| Timeline |
| Franklin Federal Lim |
| Calamos Timpani Small |
Franklin Federal and Calamos Timpani Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Calamos Timpani
The main advantage of trading using opposite Franklin Federal and Calamos Timpani positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Calamos Timpani 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 Calamos Timpani will offset losses from the drop in Calamos Timpani's long position.| Franklin Federal vs. Touchstone Ultra Short | Franklin Federal vs. Transam Short Term Bond | Franklin Federal vs. Nuveen Short Term | Franklin Federal vs. Aamhimco Short Duration |
| Calamos Timpani vs. Kirr Marbach Partners | Calamos Timpani vs. Tax Managed Large Cap | Calamos Timpani vs. Qs Growth Fund | Calamos Timpani vs. Pabrai Wagons Institutional |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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