Correlation Between NYSE Composite and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Franklin Growth 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 Growth 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 Growth Opportunities, you can compare the effects of market volatilities on NYSE Composite and Franklin Growth 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 Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Franklin Growth.
Diversification Opportunities for NYSE Composite and Franklin Growth
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Franklin is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Franklin Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth Oppo 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 Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth Oppo has no effect on the direction of NYSE Composite i.e., NYSE Composite and Franklin Growth go up and down completely randomly.
Pair Corralation between NYSE Composite and Franklin Growth
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.02 times less return on investment than Franklin Growth. But when comparing it to its historical volatility, NYSE Composite is 1.68 times less risky than Franklin Growth. It trades about 0.41 of its potential returns per unit of risk. Franklin Growth Opportunities is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,645 in Franklin Growth Opportunities on September 2, 2024 and sell it today you would earn a total of 195.00 from holding Franklin Growth Opportunities or generate 5.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Franklin Growth Opportunities
Performance |
| Timeline |
NYSE Composite and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Franklin Growth Opportunities
Pair trading matchups for Franklin Growth
Pair Trading with NYSE Composite and Franklin Growth
The main advantage of trading using opposite NYSE Composite and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Franklin Growth 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 Growth will offset losses from the drop in Franklin Growth's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Franklin Growth vs. Mfs International Diversification | Franklin Growth vs. John Hancock Bond | Franklin Growth vs. Prudential Total Return | Franklin Growth vs. New World Fund |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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