Correlation Between Ppm High and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Ppm High and Franklin Mutual 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 Ppm High and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ppm High Yield and Franklin Mutual European, you can compare the effects of market volatilities on Ppm High and Franklin Mutual 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 Ppm High with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ppm High and Franklin Mutual.
Diversification Opportunities for Ppm High and Franklin Mutual
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ppm and Franklin is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ppm High Yield and Franklin Mutual European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual European and Ppm 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 Ppm High Yield are associated (or correlated) with Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual European has no effect on the direction of Ppm High i.e., Ppm High and Franklin Mutual go up and down completely randomly.
Pair Corralation between Ppm High and Franklin Mutual
Assuming the 90 days horizon Ppm High Yield is expected to generate 0.11 times more return on investment than Franklin Mutual. However, Ppm High Yield is 9.45 times less risky than Franklin Mutual. It trades about 0.29 of its potential returns per unit of risk. Franklin Mutual European is currently generating about -0.02 per unit of risk. If you would invest 894.00 in Ppm High Yield on September 2, 2024 and sell it today you would earn a total of 5.00 from holding Ppm High Yield or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ppm High Yield vs. Franklin Mutual European
Performance |
| Timeline |
| Ppm High Yield |
| Franklin Mutual European |
Ppm High and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ppm High and Franklin Mutual
The main advantage of trading using opposite Ppm High and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ppm High position performs unexpectedly, Franklin Mutual 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 Mutual will offset losses from the drop in Franklin Mutual's long position.| Ppm High vs. Clearbridge Energy Mlp | Ppm High vs. Alpsalerian Energy Infrastructure | Ppm High vs. Gamco Natural Resources | Ppm High vs. Firsthand Alternative Energy |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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