Correlation Between Prudential Short and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Prudential Short and Franklin Growth 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 Prudential Short and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Short Duration and Franklin Growth Opportunities, you can compare the effects of market volatilities on Prudential Short and Franklin Growth 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 Prudential Short with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Short and Franklin Growth.
Diversification Opportunities for Prudential Short and Franklin Growth
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prudential and Franklin is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Short Duration and Franklin Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth Oppo and Prudential Short 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 Prudential Short Duration are associated (or correlated) with Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth Oppo has no effect on the direction of Prudential Short i.e., Prudential Short and Franklin Growth go up and down completely randomly.
Pair Corralation between Prudential Short and Franklin Growth
Assuming the 90 days horizon Prudential Short is expected to generate 45.43 times less return on investment than Franklin Growth. But when comparing it to its historical volatility, Prudential Short Duration is 9.87 times less risky than Franklin Growth. It trades about 0.06 of its potential returns per unit of risk. Franklin Growth Opportunities is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 6,014 in Franklin Growth Opportunities on September 4, 2024 and sell it today you would earn a total of 330.00 from holding Franklin Growth Opportunities or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Short Duration vs. Franklin Growth Opportunities
Performance |
| Timeline |
| Prudential Short Duration |
| Franklin Growth Oppo |
Prudential Short and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Short and Franklin Growth
The main advantage of trading using opposite Prudential Short and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Short position performs unexpectedly, Franklin Growth 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 Growth will offset losses from the drop in Franklin Growth's long position.| Prudential Short vs. Live Oak Health | Prudential Short vs. Deutsche Health And | Prudential Short vs. Eventide Healthcare Life | Prudential Short vs. Health Biotchnology Portfolio |
| Franklin Growth vs. Ab Global Risk | Franklin Growth vs. Artisan Global Unconstrained | Franklin Growth vs. Ab Global Real | Franklin Growth vs. Dreyfusstandish Global Fixed |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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