Correlation Between Locorr Market and Franklin California

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Can any of the company-specific risk be diversified away by investing in both Locorr Market 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 Locorr Market and Franklin California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Locorr Market Trend and Franklin California Insured, you can compare the effects of market volatilities on Locorr Market 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 Locorr Market with a short position of Franklin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locorr Market and Franklin California.

Diversification Opportunities for Locorr Market and Franklin California

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Locorr and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Locorr Market Trend and Franklin California Insured in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin California and Locorr Market 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 Locorr Market Trend 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 has no effect on the direction of Locorr Market i.e., Locorr Market and Franklin California go up and down completely randomly.

Pair Corralation between Locorr Market and Franklin California

If you would invest  1,070  in Locorr Market Trend on September 12, 2024 and sell it today you would earn a total of  19.00  from holding Locorr Market Trend or generate 1.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Locorr Market Trend  vs.  Franklin California Insured

 Performance 
       Timeline  
Locorr Market Trend 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Locorr Market Trend has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Locorr Market is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Franklin California 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Franklin California Insured has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Franklin California is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Locorr Market and Franklin California Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Locorr Market and Franklin California

The main advantage of trading using opposite Locorr Market and Franklin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Locorr Market 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.
The idea behind Locorr Market Trend and Franklin California Insured 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.
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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