Correlation Between Pimco Small and Franklin Strategic
Can any of the company-specific risk be diversified away by investing in both Pimco Small and Franklin Strategic 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 Pimco Small and Franklin Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Small Cap and Franklin Strategic Mortgage, you can compare the effects of market volatilities on Pimco Small and Franklin Strategic 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 Pimco Small with a short position of Franklin Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Small and Franklin Strategic.
Diversification Opportunities for Pimco Small and Franklin Strategic
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pimco and Franklin is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Small Cap and Franklin Strategic Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Strategic and Pimco Small 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 Pimco Small Cap are associated (or correlated) with Franklin Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Strategic has no effect on the direction of Pimco Small i.e., Pimco Small and Franklin Strategic go up and down completely randomly.
Pair Corralation between Pimco Small and Franklin Strategic
Assuming the 90 days horizon Pimco Small Cap is expected to generate 4.08 times more return on investment than Franklin Strategic. However, Pimco Small is 4.08 times more volatile than Franklin Strategic Mortgage. It trades about 0.07 of its potential returns per unit of risk. Franklin Strategic Mortgage is currently generating about -0.05 per unit of risk. If you would invest 780.00 in Pimco Small Cap on October 25, 2024 and sell it today you would earn a total of 41.00 from holding Pimco Small Cap or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Small Cap vs. Franklin Strategic Mortgage
Performance |
| Timeline |
| Pimco Small Cap |
| Franklin Strategic |
Pimco Small and Franklin Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Small and Franklin Strategic
The main advantage of trading using opposite Pimco Small and Franklin Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Small position performs unexpectedly, Franklin Strategic 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 Strategic will offset losses from the drop in Franklin Strategic's long position.| Pimco Small vs. Pimco International Stocksplus | Pimco Small vs. Fundamental Indexplus Tr | Pimco Small vs. Stocksplus Total Return | Pimco Small vs. Pimco Stocksplus Long |
| Franklin Strategic vs. Ultraemerging Markets Profund | Franklin Strategic vs. Alphacentric Hedged Market | Franklin Strategic vs. Locorr Market Trend | Franklin Strategic vs. Franklin Emerging Market |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |