Correlation Between Strategic Asset and Franklin Government
Can any of the company-specific risk be diversified away by investing in both Strategic Asset and Franklin Government 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 Strategic Asset and Franklin Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Asset Management and Franklin Government Money, you can compare the effects of market volatilities on Strategic Asset and Franklin Government 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 Strategic Asset with a short position of Franklin Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Asset and Franklin Government.
Diversification Opportunities for Strategic Asset and Franklin Government
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Strategic and Franklin is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Asset Management and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money and Strategic Asset 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 Strategic Asset Management are associated (or correlated) with Franklin Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Strategic Asset i.e., Strategic Asset and Franklin Government go up and down completely randomly.
Pair Corralation between Strategic Asset and Franklin Government
If you would invest 1,932 in Strategic Asset Management on September 5, 2024 and sell it today you would earn a total of 83.00 from holding Strategic Asset Management or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Asset Management vs. Franklin Government Money
Performance |
| Timeline |
| Strategic Asset Mana |
| Franklin Government Money |
Strategic Asset and Franklin Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Asset and Franklin Government
The main advantage of trading using opposite Strategic Asset and Franklin Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Asset position performs unexpectedly, Franklin Government 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 Government will offset losses from the drop in Franklin Government's long position.| Strategic Asset vs. Franklin Government Money | Strategic Asset vs. Wilmington Funds | Strategic Asset vs. Lord Abbett Emerging | Strategic Asset vs. Prudential Government Money |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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