Correlation Between Oracle and Franklin Equity
Can any of the company-specific risk be diversified away by investing in both Oracle and Franklin Equity 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 Oracle and Franklin Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Franklin Equity Income, you can compare the effects of market volatilities on Oracle and Franklin Equity 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 Oracle with a short position of Franklin Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Franklin Equity.
Diversification Opportunities for Oracle and Franklin Equity
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oracle and Franklin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Franklin Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Equity Income and Oracle 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 Oracle are associated (or correlated) with Franklin Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Equity Income has no effect on the direction of Oracle i.e., Oracle and Franklin Equity go up and down completely randomly.
Pair Corralation between Oracle and Franklin Equity
Given the investment horizon of 90 days Oracle is expected to generate 3.06 times more return on investment than Franklin Equity. However, Oracle is 3.06 times more volatile than Franklin Equity Income. It trades about 0.1 of its potential returns per unit of risk. Franklin Equity Income is currently generating about 0.14 per unit of risk. If you would invest 10,799 in Oracle on September 4, 2024 and sell it today you would earn a total of 7,342 from holding Oracle or generate 67.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oracle vs. Franklin Equity Income
Performance |
| Timeline |
| Oracle |
| Franklin Equity Income |
Oracle and Franklin Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oracle and Franklin Equity
The main advantage of trading using opposite Oracle and Franklin Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Franklin Equity 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 Equity will offset losses from the drop in Franklin Equity's long position.| Oracle vs. Palo Alto Networks | Oracle vs. Crowdstrike Holdings | Oracle vs. Microsoft | Oracle vs. Block Inc |
| Franklin Equity vs. Franklin Mutual Beacon | Franklin Equity vs. Templeton Developing Markets | Franklin Equity vs. Franklin Mutual Global | Franklin Equity 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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