Correlation Between Grandeur Peak and Franklin High
Can any of the company-specific risk be diversified away by investing in both Grandeur Peak 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 Grandeur Peak and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grandeur Peak Global and Franklin High Yield, you can compare the effects of market volatilities on Grandeur Peak 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 Grandeur Peak with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grandeur Peak and Franklin High.
Diversification Opportunities for Grandeur Peak and Franklin High
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grandeur and Franklin is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Grandeur Peak Global and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield and Grandeur Peak 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 Grandeur Peak Global 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 Yield has no effect on the direction of Grandeur Peak i.e., Grandeur Peak and Franklin High go up and down completely randomly.
Pair Corralation between Grandeur Peak and Franklin High
Assuming the 90 days horizon Grandeur Peak Global is expected to generate 2.61 times more return on investment than Franklin High. However, Grandeur Peak is 2.61 times more volatile than Franklin High Yield. It trades about 0.05 of its potential returns per unit of risk. Franklin High Yield is currently generating about 0.08 per unit of risk. If you would invest 1,224 in Grandeur Peak Global on August 30, 2024 and sell it today you would earn a total of 248.00 from holding Grandeur Peak Global or generate 20.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grandeur Peak Global vs. Franklin High Yield
Performance |
| Timeline |
| Grandeur Peak Global |
| Franklin High Yield |
Grandeur Peak and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grandeur Peak and Franklin High
The main advantage of trading using opposite Grandeur Peak and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grandeur Peak 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.| Grandeur Peak vs. Blackrock Health Sciences | Grandeur Peak vs. Allianzgi Health Sciences | Grandeur Peak vs. Deutsche Health And | Grandeur Peak vs. The Gabelli Healthcare |
| Franklin High vs. Pgim Jennison Technology | Franklin High vs. Allianzgi Technology Fund | Franklin High vs. Hennessy Technology Fund | Franklin High vs. Invesco Technology 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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