Correlation Between NYSE Composite and Franklin Floating
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Franklin Floating 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 Floating 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 Floating Rate, you can compare the effects of market volatilities on NYSE Composite and Franklin Floating 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 Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Franklin Floating.
Diversification Opportunities for NYSE Composite and Franklin Floating
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Franklin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Franklin Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Floating Rate 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 Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Floating Rate has no effect on the direction of NYSE Composite i.e., NYSE Composite and Franklin Floating go up and down completely randomly.
Pair Corralation between NYSE Composite and Franklin Floating
Assuming the 90 days trading horizon NYSE Composite is expected to generate 9.68 times more return on investment than Franklin Floating. However, NYSE Composite is 9.68 times more volatile than Franklin Floating Rate. It trades about 0.28 of its potential returns per unit of risk. Franklin Floating Rate is currently generating about -0.18 per unit of risk. If you would invest 1,925,429 in NYSE Composite on November 4, 2024 and sell it today you would earn a total of 74,453 from holding NYSE Composite or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Franklin Floating Rate
Performance |
| Timeline |
NYSE Composite and Franklin Floating Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Franklin Floating Rate
Pair trading matchups for Franklin Floating
Pair Trading with NYSE Composite and Franklin Floating
The main advantage of trading using opposite NYSE Composite and Franklin Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Franklin Floating 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 Floating will offset losses from the drop in Franklin Floating's long position.| NYSE Composite vs. Aris Water Solutions | NYSE Composite vs. Marfrig Global Foods | NYSE Composite vs. CenterPoint Energy | NYSE Composite vs. Sysco |
| Franklin Floating vs. Angel Oak Financial | Franklin Floating vs. Ab Government Exchange | Franklin Floating vs. Rmb Mendon Financial | Franklin Floating vs. Financials Ultrasector Profund |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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