Correlation Between Rbb Fund and Franklin Federal
Can any of the company-specific risk be diversified away by investing in both Rbb Fund and Franklin Federal 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 Rbb Fund and Franklin Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rbb Fund and Franklin Federal Tax Free, you can compare the effects of market volatilities on Rbb Fund and Franklin Federal 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 Rbb Fund with a short position of Franklin Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rbb Fund and Franklin Federal.
Diversification Opportunities for Rbb Fund and Franklin Federal
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rbb and Franklin is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Rbb Fund and Franklin Federal Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Federal Tax and Rbb Fund 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 Rbb Fund are associated (or correlated) with Franklin Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Federal Tax has no effect on the direction of Rbb Fund i.e., Rbb Fund and Franklin Federal go up and down completely randomly.
Pair Corralation between Rbb Fund and Franklin Federal
Assuming the 90 days horizon Rbb Fund is expected to generate 1.12 times less return on investment than Franklin Federal. But when comparing it to its historical volatility, Rbb Fund is 1.25 times less risky than Franklin Federal. It trades about 0.09 of its potential returns per unit of risk. Franklin Federal Tax Free is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 991.00 in Franklin Federal Tax Free on September 12, 2024 and sell it today you would earn a total of 110.00 from holding Franklin Federal Tax Free or generate 11.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rbb Fund vs. Franklin Federal Tax Free
Performance |
| Timeline |
| Rbb Fund |
| Franklin Federal Tax |
Rbb Fund and Franklin Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rbb Fund and Franklin Federal
The main advantage of trading using opposite Rbb Fund and Franklin Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rbb Fund position performs unexpectedly, Franklin Federal 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 Federal will offset losses from the drop in Franklin Federal's long position.| Rbb Fund vs. Rationalpier 88 Convertible | Rbb Fund vs. Advent Claymore Convertible | Rbb Fund vs. Virtus Convertible | Rbb Fund vs. Absolute Convertible Arbitrage |
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 .
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