Correlation Between Multisector Bond and Franklin
Can any of the company-specific risk be diversified away by investing in both Multisector Bond and Franklin 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 Multisector Bond and Franklin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multisector Bond Sma and Franklin Government Money, you can compare the effects of market volatilities on Multisector Bond and Franklin 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 Multisector Bond with a short position of Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multisector Bond and Franklin.
Diversification Opportunities for Multisector Bond and Franklin
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Multisector and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Multisector Bond Sma and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money and Multisector Bond 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 Multisector Bond Sma are associated (or correlated) with Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Multisector Bond i.e., Multisector Bond and Franklin go up and down completely randomly.
Pair Corralation between Multisector Bond and Franklin
Assuming the 90 days horizon Multisector Bond Sma is expected to generate 2.49 times more return on investment than Franklin. However, Multisector Bond is 2.49 times more volatile than Franklin Government Money. It trades about 0.1 of its potential returns per unit of risk. Franklin Government Money is currently generating about 0.13 per unit of risk. If you would invest 1,248 in Multisector Bond Sma on October 17, 2024 and sell it today you would earn a total of 95.00 from holding Multisector Bond Sma or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multisector Bond Sma vs. Franklin Government Money
Performance |
| Timeline |
| Multisector Bond Sma |
| Franklin Government Money |
Multisector Bond and Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multisector Bond and Franklin
The main advantage of trading using opposite Multisector Bond and Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multisector Bond position performs unexpectedly, Franklin 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 will offset losses from the drop in Franklin's long position.| Multisector Bond vs. Dws Government Money | Multisector Bond vs. Ab Government Exchange | Multisector Bond vs. Intermediate Government Bond | Multisector Bond vs. Franklin Adjustable Government |
| Franklin vs. Ab High Income | Franklin vs. Msift High Yield | Franklin vs. Millerhoward High Income | Franklin vs. Siit High Yield |
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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