Correlation Between Nicholas and Franklin High
Can any of the company-specific risk be diversified away by investing in both Nicholas 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 Nicholas and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicholas Ltd Edition and Franklin High Yield, you can compare the effects of market volatilities on Nicholas 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 Nicholas with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicholas and Franklin High.
Diversification Opportunities for Nicholas and Franklin High
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nicholas and Franklin is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Nicholas Ltd Edition 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 Nicholas 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 Nicholas Ltd Edition 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 Nicholas i.e., Nicholas and Franklin High go up and down completely randomly.
Pair Corralation between Nicholas and Franklin High
Assuming the 90 days horizon Nicholas Ltd Edition is expected to under-perform the Franklin High. In addition to that, Nicholas is 4.41 times more volatile than Franklin High Yield. It trades about -0.01 of its total potential returns per unit of risk. Franklin High Yield is currently generating about 0.16 per unit of volatility. If you would invest 905.00 in Franklin High Yield on September 14, 2024 and sell it today you would earn a total of 6.00 from holding Franklin High Yield or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nicholas Ltd Edition vs. Franklin High Yield
Performance |
| Timeline |
| Nicholas Edition |
| Franklin High Yield |
Nicholas and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicholas and Franklin High
The main advantage of trading using opposite Nicholas and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicholas 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.| Nicholas vs. Nicholas Equity Income | Nicholas vs. Nicholas Ii Inc | Nicholas vs. Nicholas Fund Inc | Nicholas vs. Nicholas Ii Inc |
| Franklin High vs. Blackrock High Yield | Franklin High vs. Voya High Yield | Franklin High vs. Guggenheim High Yield | Franklin High vs. Gmo High Yield |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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