Correlation Between International Investors and Franklin California
Can any of the company-specific risk be diversified away by investing in both International Investors and Franklin California 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 International Investors and Franklin California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Investors Gold and Franklin California Tax Free, you can compare the effects of market volatilities on International Investors and Franklin California 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 International Investors with a short position of Franklin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and Franklin California.
Diversification Opportunities for International Investors and Franklin California
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between International and FRANKLIN is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and Franklin California Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin California Tax and International Investors 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 International Investors Gold are associated (or correlated) with Franklin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin California Tax has no effect on the direction of International Investors i.e., International Investors and Franklin California go up and down completely randomly.
Pair Corralation between International Investors and Franklin California
Assuming the 90 days horizon International Investors Gold is expected to generate 7.01 times more return on investment than Franklin California. However, International Investors is 7.01 times more volatile than Franklin California Tax Free. It trades about 0.09 of its potential returns per unit of risk. Franklin California Tax Free is currently generating about 0.05 per unit of risk. If you would invest 682.00 in International Investors Gold on November 9, 2024 and sell it today you would earn a total of 329.00 from holding International Investors Gold or generate 48.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Investors Gold vs. Franklin California Tax Free
Performance |
| Timeline |
| International Investors |
| Franklin California Tax |
International Investors and Franklin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and Franklin California
The main advantage of trading using opposite International Investors and Franklin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors position performs unexpectedly, Franklin California 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 California will offset losses from the drop in Franklin California's long position.| International Investors vs. Rbc Small Cap | International Investors vs. Needham Small Cap | International Investors vs. Smallcap Fund Fka | International Investors vs. Cardinal Small Cap |
| Franklin California vs. Barings Active Short | Franklin California vs. Angel Oak Ultrashort | Franklin California vs. Nuveen Short Term | Franklin California vs. Aqr Long Short Equity |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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