Correlation Between Realestaterealreturn and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Realestaterealreturn and Franklin Growth 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 Realestaterealreturn and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Realestaterealreturn Strategy Fund and Franklin Growth Fund, you can compare the effects of market volatilities on Realestaterealreturn and Franklin Growth 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 Realestaterealreturn with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Realestaterealreturn and Franklin Growth.
Diversification Opportunities for Realestaterealreturn and Franklin Growth
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Realestaterealreturn and Franklin is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Realestaterealreturn Strategy and Franklin Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth and Realestaterealreturn 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 Realestaterealreturn Strategy Fund are associated (or correlated) with Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth has no effect on the direction of Realestaterealreturn i.e., Realestaterealreturn and Franklin Growth go up and down completely randomly.
Pair Corralation between Realestaterealreturn and Franklin Growth
Assuming the 90 days horizon Realestaterealreturn Strategy Fund is expected to generate 0.95 times more return on investment than Franklin Growth. However, Realestaterealreturn Strategy Fund is 1.05 times less risky than Franklin Growth. It trades about 0.04 of its potential returns per unit of risk. Franklin Growth Fund is currently generating about 0.01 per unit of risk. If you would invest 2,425 in Realestaterealreturn Strategy Fund on October 25, 2024 and sell it today you would earn a total of 206.00 from holding Realestaterealreturn Strategy Fund or generate 8.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.51% |
| Values | Daily Returns |
Realestaterealreturn Strategy vs. Franklin Growth Fund
Performance |
| Timeline |
| Realestaterealreturn |
| Franklin Growth |
Realestaterealreturn and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Realestaterealreturn and Franklin Growth
The main advantage of trading using opposite Realestaterealreturn and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Realestaterealreturn position performs unexpectedly, Franklin Growth 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 Growth will offset losses from the drop in Franklin Growth's long position.The idea behind Realestaterealreturn Strategy Fund and Franklin Growth Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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