Correlation Between Franklin Federal and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Growth Fund 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 Growth Fund 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 Growth Fund Of, you can compare the effects of market volatilities on Franklin Federal and Growth Fund 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 Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Growth Fund.
Diversification Opportunities for Franklin Federal and Growth Fund
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Growth is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Limited Term and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund 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 Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of Franklin Federal i.e., Franklin Federal and Growth Fund go up and down completely randomly.
Pair Corralation between Franklin Federal and Growth Fund
Assuming the 90 days horizon Franklin Federal is expected to generate 4.89 times less return on investment than Growth Fund. But when comparing it to its historical volatility, Franklin Federal Limited Term is 10.1 times less risky than Growth Fund. It trades about 0.15 of its potential returns per unit of risk. Growth Fund Of is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,267 in Growth Fund Of on November 27, 2024 and sell it today you would earn a total of 2,247 from holding Growth Fund Of or generate 42.66% 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. Growth Fund Of
Performance |
| Timeline |
| Franklin Federal Lim |
| Growth Fund |
Franklin Federal and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Growth Fund
The main advantage of trading using opposite Franklin Federal and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Growth Fund 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| Franklin Federal vs. Shelton Emerging Markets | Franklin Federal vs. Siit Emerging Markets | Franklin Federal vs. Hartford Schroders Emerging | Franklin Federal vs. Angel Oak Multi Strategy |
| Growth Fund vs. Manning Napier Diversified | Growth Fund vs. Voya Solution Conservative | Growth Fund vs. Jhancock Diversified Macro | Growth Fund vs. Massmutual Premier Diversified |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| 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 Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |