Correlation Between NYSE Composite and Franklin New
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Franklin New 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 New 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 New Jersey, you can compare the effects of market volatilities on NYSE Composite and Franklin New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Franklin New.
Diversification Opportunities for NYSE Composite and Franklin New
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and FRANKLIN is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Franklin New Jersey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New Jersey 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New Jersey has no effect on the direction of NYSE Composite i.e., NYSE Composite and Franklin New go up and down completely randomly.
Pair Corralation between NYSE Composite and Franklin New
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.14 times more return on investment than Franklin New. However, NYSE Composite is 3.14 times more volatile than Franklin New Jersey. It trades about 0.16 of its potential returns per unit of risk. Franklin New Jersey is currently generating about 0.17 per unit of risk. If you would invest 1,544,050 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 483,154 from holding NYSE Composite or generate 31.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
NYSE Composite vs. Franklin New Jersey
Performance |
| Timeline |
NYSE Composite and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Franklin New Jersey
Pair trading matchups for Franklin New
Pair Trading with NYSE Composite and Franklin New
The main advantage of trading using opposite NYSE Composite and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Franklin New 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 New will offset losses from the drop in Franklin New's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Franklin New vs. Franklin Mutual Beacon | Franklin New vs. Templeton Developing Markets | Franklin New vs. Franklin Mutual Global | Franklin New vs. Franklin Mutual Global |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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