Correlation Between Cref Money and Franklin High
Can any of the company-specific risk be diversified away by investing in both Cref Money and Franklin High 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 Cref Money and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Money Market and Franklin High Yield, you can compare the effects of market volatilities on Cref Money and Franklin High 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 Cref Money with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Money and Franklin High.
Diversification Opportunities for Cref Money and Franklin High
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cref and Franklin is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Cref Money Market and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield and Cref Money 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 Cref Money Market are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Yield has no effect on the direction of Cref Money i.e., Cref Money and Franklin High go up and down completely randomly.
Pair Corralation between Cref Money and Franklin High
Assuming the 90 days trading horizon Cref Money is expected to generate 3.28 times less return on investment than Franklin High. But when comparing it to its historical volatility, Cref Money Market is 8.94 times less risky than Franklin High. It trades about 1.02 of its potential returns per unit of risk. Franklin High Yield is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 905.00 in Franklin High Yield on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Franklin High Yield or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cref Money Market vs. Franklin High Yield
Performance |
| Timeline |
| Cref Money Market |
| Franklin High Yield |
Cref Money and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Money and Franklin High
The main advantage of trading using opposite Cref Money and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Money position performs unexpectedly, Franklin High 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 High will offset losses from the drop in Franklin High's long position.| Cref Money vs. Davis Financial Fund | Cref Money vs. Blackrock Financial Institutions | Cref Money vs. Transamerica Financial Life | Cref Money vs. Mesirow Financial Small |
| Franklin High vs. Lebenthal Lisanti Small | Franklin High vs. Guidemark Smallmid Cap | Franklin High vs. Vy Columbia Small | Franklin High vs. Ab 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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