Correlation Between Aim Taxexempt and Franklin Pennsylvania
Can any of the company-specific risk be diversified away by investing in both Aim Taxexempt and Franklin Pennsylvania 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 Aim Taxexempt and Franklin Pennsylvania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aim Taxexempt Funds and Franklin Pennsylvania Tax Free, you can compare the effects of market volatilities on Aim Taxexempt and Franklin Pennsylvania 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 Aim Taxexempt with a short position of Franklin Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aim Taxexempt and Franklin Pennsylvania.
Diversification Opportunities for Aim Taxexempt and Franklin Pennsylvania
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aim and Franklin is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Aim Taxexempt Funds and Franklin Pennsylvania Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Pennsylvania and Aim Taxexempt 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 Aim Taxexempt Funds are associated (or correlated) with Franklin Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Pennsylvania has no effect on the direction of Aim Taxexempt i.e., Aim Taxexempt and Franklin Pennsylvania go up and down completely randomly.
Pair Corralation between Aim Taxexempt and Franklin Pennsylvania
Assuming the 90 days horizon Aim Taxexempt Funds is expected to generate 1.03 times more return on investment than Franklin Pennsylvania. However, Aim Taxexempt is 1.03 times more volatile than Franklin Pennsylvania Tax Free. It trades about 0.14 of its potential returns per unit of risk. Franklin Pennsylvania Tax Free is currently generating about 0.14 per unit of risk. If you would invest 1,002 in Aim Taxexempt Funds on September 1, 2024 and sell it today you would earn a total of 45.00 from holding Aim Taxexempt Funds or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aim Taxexempt Funds vs. Franklin Pennsylvania Tax Free
Performance |
| Timeline |
| Aim Taxexempt Funds |
| Franklin Pennsylvania |
Aim Taxexempt and Franklin Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aim Taxexempt and Franklin Pennsylvania
The main advantage of trading using opposite Aim Taxexempt and Franklin Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aim Taxexempt position performs unexpectedly, Franklin Pennsylvania 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 Pennsylvania will offset losses from the drop in Franklin Pennsylvania's long position.| Aim Taxexempt vs. Invesco Municipal Income | Aim Taxexempt vs. Invesco Municipal Income | Aim Taxexempt vs. Invesco Municipal Income | Aim Taxexempt vs. Oppenheimer Rising Dividends |
| Franklin Pennsylvania vs. Franklin Mutual Beacon | Franklin Pennsylvania vs. Templeton Developing Markets | Franklin Pennsylvania vs. Franklin Mutual Global | Franklin Pennsylvania vs. Franklin Mutual Global |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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