Correlation Between Microsoft and Franklin Focused
Can any of the company-specific risk be diversified away by investing in both Microsoft and Franklin Focused 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 Microsoft and Franklin Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Franklin Focused Growth, you can compare the effects of market volatilities on Microsoft and Franklin Focused 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 Microsoft with a short position of Franklin Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Franklin Focused.
Diversification Opportunities for Microsoft and Franklin Focused
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microsoft and Franklin is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Franklin Focused Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Focused Growth and Microsoft 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 Microsoft are associated (or correlated) with Franklin Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Focused Growth has no effect on the direction of Microsoft i.e., Microsoft and Franklin Focused go up and down completely randomly.
Pair Corralation between Microsoft and Franklin Focused
Given the investment horizon of 90 days Microsoft is expected to under-perform the Franklin Focused. In addition to that, Microsoft is 1.35 times more volatile than Franklin Focused Growth. It trades about -0.04 of its total potential returns per unit of risk. Franklin Focused Growth is currently generating about 0.09 per unit of volatility. If you would invest 4,068 in Franklin Focused Growth on November 9, 2024 and sell it today you would earn a total of 104.00 from holding Franklin Focused Growth or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Franklin Focused Growth
Performance |
| Timeline |
| Microsoft |
| Franklin Focused Growth |
Microsoft and Franklin Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Franklin Focused
The main advantage of trading using opposite Microsoft and Franklin Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Franklin Focused 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 Focused will offset losses from the drop in Franklin Focused's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| Franklin Focused vs. Davis Select International | Franklin Focused vs. Tidal ETF Trust | Franklin Focused vs. Principal Value ETF | Franklin Focused vs. WisdomTree 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |