Correlation Between Versatile Bond and Franklin New
Can any of the company-specific risk be diversified away by investing in both Versatile Bond and Franklin New 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 Versatile Bond and Franklin New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Versatile Bond Portfolio and Franklin New York, you can compare the effects of market volatilities on Versatile Bond and Franklin New 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 Versatile Bond with a short position of Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Versatile Bond and Franklin New.
Diversification Opportunities for Versatile Bond and Franklin New
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Versatile and Franklin is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Versatile Bond Portfolio and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York and Versatile Bond 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 Versatile Bond Portfolio are associated (or correlated) with Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Versatile Bond i.e., Versatile Bond and Franklin New go up and down completely randomly.
Pair Corralation between Versatile Bond and Franklin New
Assuming the 90 days horizon Versatile Bond is expected to generate 4.85 times less return on investment than Franklin New. But when comparing it to its historical volatility, Versatile Bond Portfolio is 2.77 times less risky than Franklin New. It trades about 0.12 of its potential returns per unit of risk. Franklin New York is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 995.00 in Franklin New York on September 1, 2024 and sell it today you would earn a total of 16.00 from holding Franklin New York or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Versatile Bond Portfolio vs. Franklin New York
Performance |
| Timeline |
| Versatile Bond Portfolio |
| Franklin New York |
Versatile Bond and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Versatile Bond and Franklin New
The main advantage of trading using opposite Versatile Bond and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Versatile Bond position performs unexpectedly, Franklin New 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 New will offset losses from the drop in Franklin New's long position.| Versatile Bond vs. Short Term Treasury Portfolio | Versatile Bond vs. Aggressive Growth Portfolio | Versatile Bond vs. Permanent Portfolio Class | Versatile Bond vs. Thompson Bond Fund |
| Franklin New vs. Fidelity Advisor Diversified | Franklin New vs. Aqr Diversified Arbitrage | Franklin New vs. American Century Diversified | Franklin New vs. Davenport Small Cap |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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