Correlation Between Columbia Convertible and Franklin High
Can any of the company-specific risk be diversified away by investing in both Columbia Convertible 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 Columbia Convertible and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Convertible Securities and Franklin High Yield, you can compare the effects of market volatilities on Columbia Convertible 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 Columbia Convertible with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Convertible and Franklin High.
Diversification Opportunities for Columbia Convertible and Franklin High
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Columbia and Franklin is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Convertible Securitie and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield and Columbia Convertible 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 Columbia Convertible Securities 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 Yield has no effect on the direction of Columbia Convertible i.e., Columbia Convertible and Franklin High go up and down completely randomly.
Pair Corralation between Columbia Convertible and Franklin High
Assuming the 90 days horizon Columbia Convertible Securities is expected to generate about the same return on investment as Franklin High Yield. However, Columbia Convertible is 2.89 times more volatile than Franklin High Yield. It trades about -0.13 of its potential returns per unit of risk. Franklin High Yield is currently producing about -0.37 per unit of risk. If you would invest 922.00 in Franklin High Yield on October 14, 2024 and sell it today you would lose (18.00) from holding Franklin High Yield or give up 1.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Convertible Securitie vs. Franklin High Yield
Performance |
| Timeline |
| Columbia Convertible |
| Franklin High Yield |
Columbia Convertible and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Convertible and Franklin High
The main advantage of trading using opposite Columbia Convertible and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Convertible 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.| Columbia Convertible vs. Highland Longshort Healthcare | Columbia Convertible vs. Fidelity Advisor Health | Columbia Convertible vs. Eventide Healthcare Life | Columbia Convertible vs. Baron Health Care |
| Franklin High vs. Rationalpier 88 Convertible | Franklin High vs. Mainstay Vertible Fund | Franklin High vs. Columbia Convertible Securities | Franklin High vs. Allianzgi Convertible Income |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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