Correlation Between IQ Hedge and Franklin Liberty
Can any of the company-specific risk be diversified away by investing in both IQ Hedge and Franklin Liberty 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 IQ Hedge and Franklin Liberty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQ Hedge Multi Strategy and Franklin Liberty Systematic, you can compare the effects of market volatilities on IQ Hedge and Franklin Liberty 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 IQ Hedge with a short position of Franklin Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ Hedge and Franklin Liberty.
Diversification Opportunities for IQ Hedge and Franklin Liberty
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between QAI and Franklin is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding IQ Hedge Multi Strategy and Franklin Liberty Systematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty Sys and IQ Hedge 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 IQ Hedge Multi Strategy are associated (or correlated) with Franklin Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Liberty Sys has no effect on the direction of IQ Hedge i.e., IQ Hedge and Franklin Liberty go up and down completely randomly.
Pair Corralation between IQ Hedge and Franklin Liberty
Considering the 90-day investment horizon IQ Hedge Multi Strategy is expected to generate 0.47 times more return on investment than Franklin Liberty. However, IQ Hedge Multi Strategy is 2.13 times less risky than Franklin Liberty. It trades about 0.23 of its potential returns per unit of risk. Franklin Liberty Systematic is currently generating about 0.04 per unit of risk. If you would invest 3,132 in IQ Hedge Multi Strategy on September 2, 2024 and sell it today you would earn a total of 130.00 from holding IQ Hedge Multi Strategy or generate 4.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQ Hedge Multi Strategy vs. Franklin Liberty Systematic
Performance |
| Timeline |
| IQ Hedge Multi |
| Franklin Liberty Sys |
IQ Hedge and Franklin Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQ Hedge and Franklin Liberty
The main advantage of trading using opposite IQ Hedge and Franklin Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ Hedge position performs unexpectedly, Franklin Liberty 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 Liberty will offset losses from the drop in Franklin Liberty's long position.| IQ Hedge vs. Eaton Vance Enhanced | IQ Hedge vs. Grayscale Ethereum Mini | IQ Hedge vs. Intel | IQ Hedge vs. The Travelers Companies |
| Franklin Liberty vs. Eaton Vance Enhanced | Franklin Liberty vs. Grayscale Ethereum Mini | Franklin Liberty vs. Intel | Franklin Liberty vs. The Travelers Companies |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |