Correlation Between Invesco Energy and Franklin Federal
Can any of the company-specific risk be diversified away by investing in both Invesco Energy and Franklin Federal 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 Invesco Energy and Franklin Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Energy Fund and Franklin Federal Tax Free, you can compare the effects of market volatilities on Invesco Energy and Franklin Federal 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 Invesco Energy with a short position of Franklin Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Energy and Franklin Federal.
Diversification Opportunities for Invesco Energy and Franklin Federal
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Invesco and Franklin is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Energy Fund and Franklin Federal Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Federal Tax and Invesco Energy 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 Invesco Energy Fund are associated (or correlated) with Franklin Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Federal Tax has no effect on the direction of Invesco Energy i.e., Invesco Energy and Franklin Federal go up and down completely randomly.
Pair Corralation between Invesco Energy and Franklin Federal
Assuming the 90 days horizon Invesco Energy Fund is expected to under-perform the Franklin Federal. In addition to that, Invesco Energy is 3.83 times more volatile than Franklin Federal Tax Free. It trades about -0.05 of its total potential returns per unit of risk. Franklin Federal Tax Free is currently generating about -0.18 per unit of volatility. If you would invest 1,102 in Franklin Federal Tax Free on November 4, 2024 and sell it today you would lose (21.00) from holding Franklin Federal Tax Free or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Energy Fund vs. Franklin Federal Tax Free
Performance |
| Timeline |
| Invesco Energy |
| Franklin Federal Tax |
Invesco Energy and Franklin Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Energy and Franklin Federal
The main advantage of trading using opposite Invesco Energy and Franklin Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Energy position performs unexpectedly, Franklin Federal 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 Federal will offset losses from the drop in Franklin Federal's long position.| Invesco Energy vs. Great West Government Mortgage | Invesco Energy vs. Us Government Securities | Invesco Energy vs. Prudential Government Money | Invesco Energy vs. Dws Government Money |
| Franklin Federal vs. Fidelity Advisor Financial | Franklin Federal vs. Icon Financial Fund | Franklin Federal vs. Financial Industries Fund | Franklin Federal vs. Vanguard Financials Index |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |