Correlation Between NYSE Composite and Franklin BSP
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Franklin BSP 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 NYSE Composite and Franklin BSP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Franklin BSP Realty, you can compare the effects of market volatilities on NYSE Composite and Franklin BSP 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 NYSE Composite with a short position of Franklin BSP. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Franklin BSP.
Diversification Opportunities for NYSE Composite and Franklin BSP
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Franklin is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Franklin BSP Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin BSP Realty and NYSE Composite 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 NYSE Composite are associated (or correlated) with Franklin BSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin BSP Realty has no effect on the direction of NYSE Composite i.e., NYSE Composite and Franklin BSP go up and down completely randomly.
Pair Corralation between NYSE Composite and Franklin BSP
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.12 times less return on investment than Franklin BSP. But when comparing it to its historical volatility, NYSE Composite is 1.67 times less risky than Franklin BSP. It trades about 0.32 of its potential returns per unit of risk. Franklin BSP Realty is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,233 in Franklin BSP Realty on November 9, 2024 and sell it today you would earn a total of 65.00 from holding Franklin BSP Realty or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Franklin BSP Realty
Performance |
| Timeline |
NYSE Composite and Franklin BSP Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Franklin BSP Realty
Pair trading matchups for Franklin BSP
Pair Trading with NYSE Composite and Franklin BSP
The main advantage of trading using opposite NYSE Composite and Franklin BSP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Franklin BSP 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 BSP will offset losses from the drop in Franklin BSP's long position.| NYSE Composite vs. Integrated Media Technology | NYSE Composite vs. Custom Truck One | NYSE Composite vs. Funko Inc | NYSE Composite vs. Multi Ways Holdings |
| Franklin BSP vs. AGNC Investment Corp | Franklin BSP vs. Nexpoint Real Estate | Franklin BSP vs. Ladder Capital Corp | Franklin BSP vs. Apollo Commercial Real |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |