Correlation Between Catalystsmh High and Franklin Real
Can any of the company-specific risk be diversified away by investing in both Catalystsmh High and Franklin Real 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 Catalystsmh High and Franklin Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalystsmh High Income and Franklin Real Estate, you can compare the effects of market volatilities on Catalystsmh High and Franklin Real 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 Catalystsmh High with a short position of Franklin Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystsmh High and Franklin Real.
Diversification Opportunities for Catalystsmh High and Franklin Real
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Catalystsmh and Franklin is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Catalystsmh High Income and Franklin Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Real Estate and Catalystsmh High 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 Catalystsmh High Income are associated (or correlated) with Franklin Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Real Estate has no effect on the direction of Catalystsmh High i.e., Catalystsmh High and Franklin Real go up and down completely randomly.
Pair Corralation between Catalystsmh High and Franklin Real
Assuming the 90 days horizon Catalystsmh High Income is expected to generate 0.29 times more return on investment than Franklin Real. However, Catalystsmh High Income is 3.45 times less risky than Franklin Real. It trades about 0.23 of its potential returns per unit of risk. Franklin Real Estate is currently generating about -0.05 per unit of risk. If you would invest 363.00 in Catalystsmh High Income on September 12, 2024 and sell it today you would earn a total of 13.00 from holding Catalystsmh High Income or generate 3.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystsmh High Income vs. Franklin Real Estate
Performance |
| Timeline |
| Catalystsmh High Income |
| Franklin Real Estate |
Catalystsmh High and Franklin Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalystsmh High and Franklin Real
The main advantage of trading using opposite Catalystsmh High and Franklin Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalystsmh High position performs unexpectedly, Franklin Real 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 Real will offset losses from the drop in Franklin Real's long position.| Catalystsmh High vs. Putnman Retirement Ready | Catalystsmh High vs. Transamerica Cleartrack Retirement | Catalystsmh High vs. Saat Moderate Strategy | Catalystsmh High vs. Wilmington Trust Retirement |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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