Correlation Between Old Westbury and Franklin California
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Franklin California 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 Old Westbury and Franklin California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Short Term and Franklin California Tax Free, you can compare the effects of market volatilities on Old Westbury and Franklin California 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 Old Westbury with a short position of Franklin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Franklin California.
Diversification Opportunities for Old Westbury and Franklin California
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Old and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term and Franklin California Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin California Tax and Old Westbury 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 Old Westbury Short Term are associated (or correlated) with Franklin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin California Tax has no effect on the direction of Old Westbury i.e., Old Westbury and Franklin California go up and down completely randomly.
Pair Corralation between Old Westbury and Franklin California
Assuming the 90 days horizon Old Westbury Short Term is expected to generate 0.37 times more return on investment than Franklin California. However, Old Westbury Short Term is 2.7 times less risky than Franklin California. It trades about 0.17 of its potential returns per unit of risk. Franklin California Tax Free is currently generating about 0.01 per unit of risk. If you would invest 961.00 in Old Westbury Short Term on January 10, 2025 and sell it today you would earn a total of 53.00 from holding Old Westbury Short Term or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 56.28% |
| Values | Daily Returns |
Old Westbury Short Term vs. Franklin California Tax Free
Performance |
| Timeline |
| Old Westbury Short |
| Franklin California Tax |
Old Westbury and Franklin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Franklin California
The main advantage of trading using opposite Old Westbury and Franklin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Franklin California 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 California will offset losses from the drop in Franklin California's long position.| Old Westbury vs. Transamerica Short Term Bond | Old Westbury vs. Barings Active Short | Old Westbury vs. Nuveen Short Term | Old Westbury vs. Alpine Ultra Short |
| Franklin California vs. Franklin Mutual Beacon | Franklin California vs. Templeton Developing Markets | Franklin California vs. Franklin Mutual Global | Franklin California 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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