Correlation Between Harbor Convertible and Franklin
Can any of the company-specific risk be diversified away by investing in both Harbor Convertible and Franklin 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 Harbor Convertible and Franklin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harbor Vertible Securities and Franklin Government Money, you can compare the effects of market volatilities on Harbor Convertible and Franklin 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 Harbor Convertible with a short position of Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Convertible and Franklin.
Diversification Opportunities for Harbor Convertible and Franklin
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Harbor and Franklin is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Vertible Securities and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money and Harbor Convertible 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 Harbor Vertible Securities are associated (or correlated) with Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Harbor Convertible i.e., Harbor Convertible and Franklin go up and down completely randomly.
Pair Corralation between Harbor Convertible and Franklin
Assuming the 90 days horizon Harbor Vertible Securities is expected to generate 4.02 times more return on investment than Franklin. However, Harbor Convertible is 4.02 times more volatile than Franklin Government Money. It trades about 0.1 of its potential returns per unit of risk. Franklin Government Money is currently generating about 0.13 per unit of risk. If you would invest 942.00 in Harbor Vertible Securities on August 30, 2024 and sell it today you would earn a total of 263.00 from holding Harbor Vertible Securities or generate 27.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harbor Vertible Securities vs. Franklin Government Money
Performance |
| Timeline |
| Harbor Vertible Secu |
| Franklin Government Money |
Harbor Convertible and Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbor Convertible and Franklin
The main advantage of trading using opposite Harbor Convertible and Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor Convertible position performs unexpectedly, Franklin 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 will offset losses from the drop in Franklin's long position.| Harbor Convertible vs. Putnam Vertible Securities | Harbor Convertible vs. Columbia Vertible Securities | Harbor Convertible vs. Lord Abbett Convertible | Harbor Convertible vs. Franklin Vertible Securities |
| Franklin vs. Franklin Mutual Beacon | Franklin vs. Franklin Mutual Global | Franklin vs. Franklin Mutual Global | Franklin vs. Franklin Mutual Global |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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