Correlation Between Franklin Federal and First American
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and First American 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 First American 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 First American Funds, you can compare the effects of market volatilities on Franklin Federal and First American 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 First American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and First American.
Diversification Opportunities for Franklin Federal and First American
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and First is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Limited Term and First American Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First American Funds 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 First American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First American Funds has no effect on the direction of Franklin Federal i.e., Franklin Federal and First American go up and down completely randomly.
Pair Corralation between Franklin Federal and First American
If you would invest 1,029 in Franklin Federal Limited Term on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Franklin Federal Limited Term or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Federal Limited Term vs. First American Funds
Performance |
| Timeline |
| Franklin Federal Lim |
| First American Funds |
Franklin Federal and First American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and First American
The main advantage of trading using opposite Franklin Federal and First American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, First American 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 First American will offset losses from the drop in First American's long position.| Franklin Federal vs. Franklin Mutual Beacon | Franklin Federal vs. Templeton Developing Markets | Franklin Federal vs. Franklin Mutual Global | Franklin Federal vs. Franklin Mutual Global |
| First American vs. Money Market Obligations | First American vs. Franklin Government Money | First American vs. Ubs Money Series | First American vs. General Money Market |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |