Correlation Between Georgia Tax and Franklin New
Can any of the company-specific risk be diversified away by investing in both Georgia Tax and Franklin New 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 Georgia Tax and Franklin New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Georgia Tax Free Bond and Franklin New Jersey, you can compare the effects of market volatilities on Georgia Tax and Franklin New 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 Georgia Tax with a short position of Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Georgia Tax and Franklin New.
Diversification Opportunities for Georgia Tax and Franklin New
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Georgia and Franklin is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Georgia Tax Free Bond and Franklin New Jersey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New Jersey and Georgia Tax 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 Georgia Tax Free Bond are associated (or correlated) with Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New Jersey has no effect on the direction of Georgia Tax i.e., Georgia Tax and Franklin New go up and down completely randomly.
Pair Corralation between Georgia Tax and Franklin New
Assuming the 90 days horizon Georgia Tax Free Bond is expected to generate 1.11 times more return on investment than Franklin New. However, Georgia Tax is 1.11 times more volatile than Franklin New Jersey. It trades about 0.11 of its potential returns per unit of risk. Franklin New Jersey is currently generating about 0.09 per unit of risk. If you would invest 1,010 in Georgia Tax Free Bond on September 12, 2024 and sell it today you would earn a total of 99.00 from holding Georgia Tax Free Bond or generate 9.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.7% |
| Values | Daily Returns |
Georgia Tax Free Bond vs. Franklin New Jersey
Performance |
| Timeline |
| Georgia Tax Free |
| Franklin New Jersey |
Georgia Tax and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Georgia Tax and Franklin New
The main advantage of trading using opposite Georgia Tax and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Georgia Tax position performs unexpectedly, Franklin New 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 New will offset losses from the drop in Franklin New's long position.| Georgia Tax vs. New Jersey Tax Free | Georgia Tax vs. Maryland Tax Free Bond | Georgia Tax vs. New York Tax Free | Georgia Tax vs. Maryland Short Term Tax Free |
| Franklin New vs. New York Tax Free | Franklin New vs. Georgia Tax Free Bond | Franklin New vs. T Rowe Price | Franklin New vs. Maryland Tax Free Bond |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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