Correlation Between Franklin Federal and Saat Conservative
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Saat Conservative 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 Saat Conservative 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 Saat Servative Strategy, you can compare the effects of market volatilities on Franklin Federal and Saat Conservative 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 Saat Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Saat Conservative.
Diversification Opportunities for Franklin Federal and Saat Conservative
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FRANKLIN and SAAT is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Limited Term and Saat Servative Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Servative Strategy 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 Saat Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Servative Strategy has no effect on the direction of Franklin Federal i.e., Franklin Federal and Saat Conservative go up and down completely randomly.
Pair Corralation between Franklin Federal and Saat Conservative
Assuming the 90 days horizon Franklin Federal is expected to generate 1.37 times less return on investment than Saat Conservative. But when comparing it to its historical volatility, Franklin Federal Limited Term is 2.03 times less risky than Saat Conservative. It trades about 0.14 of its potential returns per unit of risk. Saat Servative Strategy is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 954.00 in Saat Servative Strategy on September 3, 2024 and sell it today you would earn a total of 103.00 from holding Saat Servative Strategy or generate 10.8% 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. Saat Servative Strategy
Performance |
| Timeline |
| Franklin Federal Lim |
| Saat Servative Strategy |
Franklin Federal and Saat Conservative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Saat Conservative
The main advantage of trading using opposite Franklin Federal and Saat Conservative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Saat Conservative 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 Saat Conservative will offset losses from the drop in Saat Conservative's long position.| Franklin Federal vs. Alpine High Yield | Franklin Federal vs. Guggenheim High Yield | Franklin Federal vs. Blackrock High Yield | Franklin Federal vs. Pace High Yield |
| Saat Conservative vs. Auer Growth Fund | Saat Conservative vs. Rbb Fund | Saat Conservative vs. Balanced Fund Investor | Saat Conservative vs. Growth Strategy Fund |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |