Correlation Between Fm Investments and Franklin High
Can any of the company-specific risk be diversified away by investing in both Fm Investments 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 Fm Investments and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fm Investments Large and Franklin High Income, you can compare the effects of market volatilities on Fm Investments 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 Fm Investments with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fm Investments and Franklin High.
Diversification Opportunities for Fm Investments and Franklin High
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IAFLX and Franklin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Fm Investments Large and Franklin High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Income and Fm Investments 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 Fm Investments Large 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 Income has no effect on the direction of Fm Investments i.e., Fm Investments and Franklin High go up and down completely randomly.
Pair Corralation between Fm Investments and Franklin High
Assuming the 90 days horizon Fm Investments Large is expected to generate 3.62 times more return on investment than Franklin High. However, Fm Investments is 3.62 times more volatile than Franklin High Income. It trades about 0.28 of its potential returns per unit of risk. Franklin High Income is currently generating about 0.0 per unit of risk. If you would invest 1,880 in Fm Investments Large on September 14, 2024 and sell it today you would earn a total of 104.00 from holding Fm Investments Large or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fm Investments Large vs. Franklin High Income
Performance |
| Timeline |
| Fm Investments Large |
| Franklin High Income |
Fm Investments and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fm Investments and Franklin High
The main advantage of trading using opposite Fm Investments and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fm Investments 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.The idea behind Fm Investments Large and Franklin High Income pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Franklin High vs. Royce Opportunity Fund | Franklin High vs. Fpa Queens Road | Franklin High vs. Palm Valley Capital | Franklin High vs. Valic Company I |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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