Correlation Between Small Company and Ftfa Franklin
Can any of the company-specific risk be diversified away by investing in both Small Company and Ftfa 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 Small Company and Ftfa Franklin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Pany Growth and Ftfa Franklin Templeton Growth, you can compare the effects of market volatilities on Small Company and Ftfa 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 Small Company with a short position of Ftfa Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Company and Ftfa Franklin.
Diversification Opportunities for Small Company and Ftfa Franklin
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Small and Ftfa is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Small Pany Growth and Ftfa Franklin Templeton Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ftfa Franklin Templeton and Small Company 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 Small Pany Growth are associated (or correlated) with Ftfa Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ftfa Franklin Templeton has no effect on the direction of Small Company i.e., Small Company and Ftfa Franklin go up and down completely randomly.
Pair Corralation between Small Company and Ftfa Franklin
Assuming the 90 days horizon Small Pany Growth is expected to generate 3.79 times more return on investment than Ftfa Franklin. However, Small Company is 3.79 times more volatile than Ftfa Franklin Templeton Growth. It trades about 0.66 of its potential returns per unit of risk. Ftfa Franklin Templeton Growth is currently generating about 0.33 per unit of risk. If you would invest 1,285 in Small Pany Growth on September 3, 2024 and sell it today you would earn a total of 384.00 from holding Small Pany Growth or generate 29.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Pany Growth vs. Ftfa Franklin Templeton Growth
Performance |
| Timeline |
| Small Pany Growth |
| Ftfa Franklin Templeton |
Small Company and Ftfa Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Company and Ftfa Franklin
The main advantage of trading using opposite Small Company and Ftfa Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Company position performs unexpectedly, Ftfa 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 Ftfa Franklin will offset losses from the drop in Ftfa Franklin's long position.| Small Company vs. Mid Cap Growth | Small Company vs. Growth Portfolio Class | Small Company vs. Morgan Stanley Multi | Small Company vs. Emerging Markets Portfolio |
| Ftfa Franklin vs. American Funds The | Ftfa Franklin vs. American Funds The | Ftfa Franklin vs. Income Fund Of | Ftfa Franklin vs. Income Fund Of |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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