Correlation Between Franklin Utilities and Atlantica Sustainable
Can any of the company-specific risk be diversified away by investing in both Franklin Utilities and Atlantica Sustainable 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 Utilities and Atlantica Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Utilities Fund and Atlantica Sustainable Infrastructure, you can compare the effects of market volatilities on Franklin Utilities and Atlantica Sustainable 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 Utilities with a short position of Atlantica Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Utilities and Atlantica Sustainable.
Diversification Opportunities for Franklin Utilities and Atlantica Sustainable
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Atlantica is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Utilities Fund and Atlantica Sustainable Infrastr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantica Sustainable and Franklin Utilities 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 Utilities Fund are associated (or correlated) with Atlantica Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantica Sustainable has no effect on the direction of Franklin Utilities i.e., Franklin Utilities and Atlantica Sustainable go up and down completely randomly.
Pair Corralation between Franklin Utilities and Atlantica Sustainable
Assuming the 90 days horizon Franklin Utilities Fund is expected to generate 11.02 times more return on investment than Atlantica Sustainable. However, Franklin Utilities is 11.02 times more volatile than Atlantica Sustainable Infrastructure. It trades about 0.13 of its potential returns per unit of risk. Atlantica Sustainable Infrastructure is currently generating about 0.21 per unit of risk. If you would invest 2,495 in Franklin Utilities Fund on August 30, 2024 and sell it today you would earn a total of 130.00 from holding Franklin Utilities Fund or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Utilities Fund vs. Atlantica Sustainable Infrastr
Performance |
| Timeline |
| Franklin Utilities |
| Atlantica Sustainable |
Franklin Utilities and Atlantica Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Utilities and Atlantica Sustainable
The main advantage of trading using opposite Franklin Utilities and Atlantica Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Utilities position performs unexpectedly, Atlantica Sustainable 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 Atlantica Sustainable will offset losses from the drop in Atlantica Sustainable's long position.| Franklin Utilities vs. Versatile Bond Portfolio | Franklin Utilities vs. John Hancock Money | Franklin Utilities vs. Mesirow Financial Small | Franklin Utilities vs. Bbh Intermediate Municipal |
| Atlantica Sustainable vs. Clearway Energy | Atlantica Sustainable vs. Brookfield Renewable Corp | Atlantica Sustainable vs. Nextera Energy Partners | Atlantica Sustainable vs. Brookfield Renewable Partners |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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