Correlation Between Franklin Growth and Franklin Corefolio
Can any of the company-specific risk be diversified away by investing in both Franklin Growth and Franklin Corefolio 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 Growth and Franklin Corefolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Growth Allocation and Franklin Efolio Allocation, you can compare the effects of market volatilities on Franklin Growth and Franklin Corefolio 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 Growth with a short position of Franklin Corefolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Franklin Corefolio.
Diversification Opportunities for Franklin Growth and Franklin Corefolio
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Franklin is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Allocation and Franklin Efolio Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Efolio Allo and Franklin Growth 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 Growth Allocation are associated (or correlated) with Franklin Corefolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Efolio Allo has no effect on the direction of Franklin Growth i.e., Franklin Growth and Franklin Corefolio go up and down completely randomly.
Pair Corralation between Franklin Growth and Franklin Corefolio
Assuming the 90 days horizon Franklin Growth is expected to generate 1.22 times less return on investment than Franklin Corefolio. But when comparing it to its historical volatility, Franklin Growth Allocation is 1.45 times less risky than Franklin Corefolio. It trades about 0.35 of its potential returns per unit of risk. Franklin Efolio Allocation is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,260 in Franklin Efolio Allocation on September 4, 2024 and sell it today you would earn a total of 102.00 from holding Franklin Efolio Allocation or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Growth Allocation vs. Franklin Efolio Allocation
Performance |
| Timeline |
| Franklin Growth Allo |
| Franklin Efolio Allo |
Franklin Growth and Franklin Corefolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Growth and Franklin Corefolio
The main advantage of trading using opposite Franklin Growth and Franklin Corefolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth position performs unexpectedly, Franklin Corefolio 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 Franklin Corefolio will offset losses from the drop in Franklin Corefolio's long position.| Franklin Growth vs. Lind Capital Partners | Franklin Growth vs. Touchstone Premium Yield | Franklin Growth vs. Ab Impact Municipal | Franklin Growth vs. Bbh Intermediate Municipal |
| Franklin Corefolio vs. Franklin Founding Funds | Franklin Corefolio vs. Franklin Growth Allocation | Franklin Corefolio vs. Franklin Growth Fund | Franklin Corefolio vs. Franklin Growth Opportunities |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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