Correlation Between Franklin Federal and Hartford Inflation
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Hartford Inflation 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 Hartford Inflation 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 The Hartford Inflation, you can compare the effects of market volatilities on Franklin Federal and Hartford Inflation 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 Hartford Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Hartford Inflation.
Diversification Opportunities for Franklin Federal and Hartford Inflation
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Hartford is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Limited Term and The Hartford Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Inflation 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 Hartford Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Inflation has no effect on the direction of Franklin Federal i.e., Franklin Federal and Hartford Inflation go up and down completely randomly.
Pair Corralation between Franklin Federal and Hartford Inflation
Assuming the 90 days horizon Franklin Federal Limited Term is expected to generate 0.38 times more return on investment than Hartford Inflation. However, Franklin Federal Limited Term is 2.67 times less risky than Hartford Inflation. It trades about 0.21 of its potential returns per unit of risk. The Hartford Inflation is currently generating about 0.07 per unit of risk. If you would invest 977.00 in Franklin Federal Limited Term on September 14, 2024 and sell it today you would earn a total of 56.00 from holding Franklin Federal Limited Term or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Federal Limited Term vs. The Hartford Inflation
Performance |
| Timeline |
| Franklin Federal Lim |
| The Hartford Inflation |
Franklin Federal and Hartford Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Hartford Inflation
The main advantage of trading using opposite Franklin Federal and Hartford Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Hartford Inflation 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 Hartford Inflation will offset losses from the drop in Hartford Inflation's long position.| Franklin Federal vs. Alliancebernstein National Municipal | Franklin Federal vs. California High Yield Municipal | Franklin Federal vs. Gamco Global Telecommunications | Franklin Federal vs. T Rowe Price |
| Hartford Inflation vs. Easterly Snow Longshort | Hartford Inflation vs. Franklin Federal Limited Term | Hartford Inflation vs. Prudential Short Duration | Hartford Inflation vs. Virtus Multi Sector Short |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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