Correlation Between Pace High and Franklin Utilities
Can any of the company-specific risk be diversified away by investing in both Pace High and Franklin Utilities 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 Pace High and Franklin Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace High Yield and Franklin Utilities Fund, you can compare the effects of market volatilities on Pace High and Franklin Utilities 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 Pace High with a short position of Franklin Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace High and Franklin Utilities.
Diversification Opportunities for Pace High and Franklin Utilities
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pace and Franklin is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pace High Yield and Franklin Utilities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Utilities and Pace High 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 Pace High Yield are associated (or correlated) with Franklin Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Utilities has no effect on the direction of Pace High i.e., Pace High and Franklin Utilities go up and down completely randomly.
Pair Corralation between Pace High and Franklin Utilities
Assuming the 90 days horizon Pace High Yield is expected to generate 0.11 times more return on investment than Franklin Utilities. However, Pace High Yield is 9.38 times less risky than Franklin Utilities. It trades about 0.29 of its potential returns per unit of risk. Franklin Utilities Fund is currently generating about 0.0 per unit of risk. If you would invest 891.00 in Pace High Yield on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Pace High Yield or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace High Yield vs. Franklin Utilities Fund
Performance |
| Timeline |
| Pace High Yield |
| Franklin Utilities |
Pace High and Franklin Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace High and Franklin Utilities
The main advantage of trading using opposite Pace High and Franklin Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace High position performs unexpectedly, Franklin Utilities 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 Utilities will offset losses from the drop in Franklin Utilities' long position.| Pace High vs. Pace Smallmedium Value | Pace High vs. Pace International Equity | Pace High vs. Pace International Equity | Pace High vs. Ubs Allocation Fund |
| Franklin Utilities vs. T Rowe Price | Franklin Utilities vs. Calvert High Yield | Franklin Utilities vs. Artisan High Income | Franklin Utilities vs. Pace High Yield |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |