Correlation Between Praxis Small and Franklin High
Can any of the company-specific risk be diversified away by investing in both Praxis Small and Franklin High 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 Praxis Small and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Praxis Small Cap and Franklin High Income, you can compare the effects of market volatilities on Praxis Small and Franklin High 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 Praxis Small with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Small and Franklin High.
Diversification Opportunities for Praxis Small and Franklin High
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Praxis and Franklin is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Small Cap and Franklin High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Income and Praxis Small 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 Praxis Small Cap are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Income has no effect on the direction of Praxis Small i.e., Praxis Small and Franklin High go up and down completely randomly.
Pair Corralation between Praxis Small and Franklin High
Assuming the 90 days horizon Praxis Small Cap is expected to generate 4.13 times more return on investment than Franklin High. However, Praxis Small is 4.13 times more volatile than Franklin High Income. It trades about 0.08 of its potential returns per unit of risk. Franklin High Income is currently generating about 0.14 per unit of risk. If you would invest 920.00 in Praxis Small Cap on September 2, 2024 and sell it today you would earn a total of 252.00 from holding Praxis Small Cap or generate 27.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Praxis Small Cap vs. Franklin High Income
Performance |
| Timeline |
| Praxis Small Cap |
| Franklin High Income |
Praxis Small and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Praxis Small and Franklin High
The main advantage of trading using opposite Praxis Small and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Small position performs unexpectedly, Franklin High 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 High will offset losses from the drop in Franklin High's long position.| Praxis Small vs. Franklin High Income | Praxis Small vs. Pace High Yield | Praxis Small vs. Legg Mason Partners | Praxis Small vs. Aqr Risk Balanced Modities |
| Franklin High vs. Balanced Fund Retail | Franklin High vs. Rbc Global Equity | Franklin High vs. Huber Capital Equity | Franklin High vs. Artisan Select Equity |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| CEOs Directory Screen CEOs from public companies around the world |