Correlation Between NBI Global and Franklin Global
Can any of the company-specific risk be diversified away by investing in both NBI Global and Franklin Global 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 NBI Global and Franklin Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NBI Global Real and Franklin Global Dividend, you can compare the effects of market volatilities on NBI Global and Franklin Global 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 NBI Global with a short position of Franklin Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Global and Franklin Global.
Diversification Opportunities for NBI Global and Franklin Global
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NBI and Franklin is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding NBI Global Real and Franklin Global Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Global Dividend and NBI Global 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 NBI Global Real are associated (or correlated) with Franklin Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Global Dividend has no effect on the direction of NBI Global i.e., NBI Global and Franklin Global go up and down completely randomly.
Pair Corralation between NBI Global and Franklin Global
Assuming the 90 days trading horizon NBI Global Real is expected to generate 1.33 times more return on investment than Franklin Global. However, NBI Global is 1.33 times more volatile than Franklin Global Dividend. It trades about 0.2 of its potential returns per unit of risk. Franklin Global Dividend is currently generating about 0.27 per unit of risk. If you would invest 2,238 in NBI Global Real on August 28, 2024 and sell it today you would earn a total of 62.00 from holding NBI Global Real or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NBI Global Real vs. Franklin Global Dividend
Performance |
| Timeline |
| NBI Global Real |
| Franklin Global Dividend |
NBI Global and Franklin Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBI Global and Franklin Global
The main advantage of trading using opposite NBI Global and Franklin Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI Global position performs unexpectedly, Franklin Global 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 Global will offset losses from the drop in Franklin Global's long position.| NBI Global vs. Global Healthcare Income | NBI Global vs. Tech Leaders Income | NBI Global vs. Brompton North American | NBI Global vs. Brompton European Dividend |
| Franklin Global vs. Global Healthcare Income | Franklin Global vs. Tech Leaders Income | Franklin Global vs. Brompton North American | Franklin Global vs. Brompton European Dividend |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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