Correlation Between Arrow Managed and Franklin Income
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Franklin Income 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 Income 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 Income Fund, you can compare the effects of market volatilities on Arrow Managed and Franklin Income 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 Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Franklin Income.
Diversification Opportunities for Arrow Managed and Franklin Income
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arrow and Franklin is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Franklin Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Income 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 Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Income has no effect on the direction of Arrow Managed i.e., Arrow Managed and Franklin Income go up and down completely randomly.
Pair Corralation between Arrow Managed and Franklin Income
Assuming the 90 days horizon Arrow Managed is expected to generate 1.71 times less return on investment than Franklin Income. In addition to that, Arrow Managed is 3.89 times more volatile than Franklin Income Fund. It trades about 0.01 of its total potential returns per unit of risk. Franklin Income Fund is currently generating about 0.07 per unit of volatility. If you would invest 206.00 in Franklin Income Fund on November 1, 2024 and sell it today you would earn a total of 30.00 from holding Franklin Income Fund or generate 14.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Franklin Income Fund
Performance |
| Timeline |
| Arrow Managed Futures |
| Franklin Income |
Arrow Managed and Franklin Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Franklin Income
The main advantage of trading using opposite Arrow Managed and Franklin Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Franklin Income 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 Income will offset losses from the drop in Franklin Income's long position.| Arrow Managed vs. Large Cap Growth Profund | Arrow Managed vs. Blackrock Large Cap | Arrow Managed vs. Fidelity Large Cap | Arrow Managed vs. Qs Large Cap |
| Franklin Income vs. Artisan Developing World | Franklin Income vs. Barings Emerging Markets | Franklin Income vs. Dreyfus Bond Market | Franklin Income vs. Inverse Emerging Markets |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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