Correlation Between Long Term and Franklin Adjustable
Can any of the company-specific risk be diversified away by investing in both Long Term and Franklin Adjustable 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 Long Term and Franklin Adjustable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Long Term Government Fund and Franklin Adjustable Government, you can compare the effects of market volatilities on Long Term and Franklin Adjustable 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 Long Term with a short position of Franklin Adjustable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Term and Franklin Adjustable.
Diversification Opportunities for Long Term and Franklin Adjustable
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Long and Franklin is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Long Term Government Fund and Franklin Adjustable Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Adjustable and Long Term 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 Long Term Government Fund are associated (or correlated) with Franklin Adjustable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Adjustable has no effect on the direction of Long Term i.e., Long Term and Franklin Adjustable go up and down completely randomly.
Pair Corralation between Long Term and Franklin Adjustable
Assuming the 90 days horizon Long Term Government Fund is expected to under-perform the Franklin Adjustable. In addition to that, Long Term is 5.26 times more volatile than Franklin Adjustable Government. It trades about -0.01 of its total potential returns per unit of risk. Franklin Adjustable Government is currently generating about 0.18 per unit of volatility. If you would invest 750.00 in Franklin Adjustable Government on October 22, 2024 and sell it today you would earn a total of 3.00 from holding Franklin Adjustable Government or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Term Government Fund vs. Franklin Adjustable Government
Performance |
| Timeline |
| Long Term Government |
| Franklin Adjustable |
Long Term and Franklin Adjustable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Term and Franklin Adjustable
The main advantage of trading using opposite Long Term and Franklin Adjustable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Term position performs unexpectedly, Franklin Adjustable 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 Adjustable will offset losses from the drop in Franklin Adjustable's long position.| Long Term vs. Intermediate Government Bond | Long Term vs. Schwab Government Money | Long Term vs. Short Term Government Fund | Long Term vs. Payden Government Fund |
| Franklin Adjustable vs. Black Oak Emerging | Franklin Adjustable vs. Delaware Emerging Markets | Franklin Adjustable vs. Catalystmillburn Hedge Strategy | Franklin Adjustable vs. Saat Defensive Strategy |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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