Correlation Between GM and Franklin Floating
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By analyzing existing cross correlation between General Motors and Franklin Floating Rate, you can compare the effects of market volatilities on GM and Franklin Floating 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 GM with a short position of Franklin Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Franklin Floating.
Diversification Opportunities for GM and Franklin Floating
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GM and Franklin is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Franklin Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Floating Rate and GM 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 General Motors are associated (or correlated) with Franklin Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Floating Rate has no effect on the direction of GM i.e., GM and Franklin Floating go up and down completely randomly.
Pair Corralation between GM and Franklin Floating
Allowing for the 90-day total investment horizon General Motors is expected to generate 15.61 times more return on investment than Franklin Floating. However, GM is 15.61 times more volatile than Franklin Floating Rate. It trades about 0.07 of its potential returns per unit of risk. Franklin Floating Rate is currently generating about 0.27 per unit of risk. If you would invest 3,617 in General Motors on September 2, 2024 and sell it today you would earn a total of 1,942 from holding General Motors or generate 53.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.67% |
| Values | Daily Returns |
General Motors vs. Franklin Floating Rate
Performance |
| Timeline |
| General Motors |
| Franklin Floating Rate |
GM and Franklin Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Franklin Floating
The main advantage of trading using opposite GM and Franklin Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Franklin Floating 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 Floating will offset losses from the drop in Franklin Floating's long position.The idea behind General Motors and Franklin Floating Rate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Franklin Floating vs. Franklin Floating Rate | Franklin Floating vs. Franklin Floating Rate | Franklin Floating vs. KLP AksjeNorge Indeks | Franklin Floating vs. Storebrand Global Solutions |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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