Correlation Between IHIT and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both IHIT and Franklin Templeton 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 IHIT and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IHIT and Franklin Templeton Limited, you can compare the effects of market volatilities on IHIT and Franklin Templeton 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 IHIT with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHIT and Franklin Templeton.
Diversification Opportunities for IHIT and Franklin Templeton
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IHIT and Franklin is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding IHIT and Franklin Templeton Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton and IHIT 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 IHIT are associated (or correlated) with Franklin Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Templeton has no effect on the direction of IHIT i.e., IHIT and Franklin Templeton go up and down completely randomly.
Pair Corralation between IHIT and Franklin Templeton
If you would invest 653.00 in Franklin Templeton Limited on November 3, 2024 and sell it today you would earn a total of 12.00 from holding Franklin Templeton Limited or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
IHIT vs. Franklin Templeton Limited
Performance |
| Timeline |
| IHIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Franklin Templeton |
IHIT and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHIT and Franklin Templeton
The main advantage of trading using opposite IHIT and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHIT position performs unexpectedly, Franklin Templeton 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 Templeton will offset losses from the drop in Franklin Templeton's long position.| IHIT vs. MFS Investment Grade | IHIT vs. Eaton Vance National | IHIT vs. Nuveen California Select | IHIT vs. Federated Premier Municipal |
| Franklin Templeton vs. MFS Investment Grade | Franklin Templeton vs. Eaton Vance National | Franklin Templeton vs. Rivernorth Opportunistic Municipalome | Franklin Templeton vs. RiverNorth Managed Duration |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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