Correlation Between Nationwide International and Franklin High
Can any of the company-specific risk be diversified away by investing in both Nationwide International and Franklin High 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 Nationwide International and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide International Index and Franklin High Income, you can compare the effects of market volatilities on Nationwide International and Franklin High 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 Nationwide International with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide International and Franklin High.
Diversification Opportunities for Nationwide International and Franklin High
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nationwide and Franklin is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide International Index and Franklin High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Income and Nationwide International 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 Nationwide International Index are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Income has no effect on the direction of Nationwide International i.e., Nationwide International and Franklin High go up and down completely randomly.
Pair Corralation between Nationwide International and Franklin High
Assuming the 90 days horizon Nationwide International is expected to generate 1.29 times less return on investment than Franklin High. In addition to that, Nationwide International is 2.4 times more volatile than Franklin High Income. It trades about 0.04 of its total potential returns per unit of risk. Franklin High Income is currently generating about 0.13 per unit of volatility. If you would invest 152.00 in Franklin High Income on September 12, 2024 and sell it today you would earn a total of 24.00 from holding Franklin High Income or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide International Index vs. Franklin High Income
Performance |
| Timeline |
| Nationwide International |
| Franklin High Income |
Nationwide International and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide International and Franklin High
The main advantage of trading using opposite Nationwide International and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide International position performs unexpectedly, Franklin High 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 High will offset losses from the drop in Franklin High's long position.| Nationwide International vs. Franklin High Income | Nationwide International vs. Needham Aggressive Growth | Nationwide International vs. Calvert High Yield | Nationwide International vs. Lgm Risk Managed |
| Franklin High vs. SCOR PK | Franklin High vs. Morningstar Unconstrained Allocation | Franklin High vs. Via Renewables | Franklin High vs. Bondbloxx ETF Trust |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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