Correlation Between Arrow Managed and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Franklin Growth 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 Arrow Managed and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Franklin Growth Opportunities, you can compare the effects of market volatilities on Arrow Managed and Franklin Growth 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 Arrow Managed with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Franklin Growth.
Diversification Opportunities for Arrow Managed and Franklin Growth
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Arrow and Franklin is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Franklin Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth Oppo and Arrow Managed 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 Arrow Managed Futures are associated (or correlated) with Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth Oppo has no effect on the direction of Arrow Managed i.e., Arrow Managed and Franklin Growth go up and down completely randomly.
Pair Corralation between Arrow Managed and Franklin Growth
Assuming the 90 days horizon Arrow Managed Futures is expected to under-perform the Franklin Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Arrow Managed Futures is 2.26 times less risky than Franklin Growth. The mutual fund trades about -0.34 of its potential returns per unit of risk. The Franklin Growth Opportunities is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 4,504 in Franklin Growth Opportunities on January 13, 2025 and sell it today you would lose (229.00) from holding Franklin Growth Opportunities or give up 5.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Franklin Growth Opportunities
Performance |
| Timeline |
| Arrow Managed Futures |
| Franklin Growth Oppo |
Arrow Managed and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Franklin Growth
The main advantage of trading using opposite Arrow Managed and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Franklin Growth 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 Growth will offset losses from the drop in Franklin Growth's long position.| Arrow Managed vs. Morningstar Global Income | Arrow Managed vs. Ms Global Fixed | Arrow Managed vs. Franklin Mutual Global | Arrow Managed vs. Tweedy Browne Global |
| Franklin Growth vs. Franklin Mutual Beacon | Franklin Growth vs. Templeton Developing Markets | Franklin Growth vs. Franklin Mutual Global | Franklin Growth 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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