Correlation Between Cref Money and Franklin
Can any of the company-specific risk be diversified away by investing in both Cref Money and Franklin 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 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 Government Money, you can compare the effects of market volatilities on Cref Money and Franklin 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Money and Franklin.
Diversification Opportunities for Cref Money and Franklin
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cref and Franklin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Cref Money Market and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Cref Money i.e., Cref Money and Franklin go up and down completely randomly.
Pair Corralation between Cref Money and Franklin
If you would invest 2,959 in Cref Money Market on August 28, 2024 and sell it today you would earn a total of 11.00 from holding Cref Money Market or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cref Money Market vs. Franklin Government Money
Performance |
| Timeline |
| Cref Money Market |
| Franklin Government Money |
Cref Money and Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Money and Franklin
The main advantage of trading using opposite Cref Money and Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Money position performs unexpectedly, Franklin 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 will offset losses from the drop in Franklin's long position.| Cref Money vs. Vanguard Total Stock | Cref Money vs. Vanguard 500 Index | Cref Money vs. Vanguard Total Stock | Cref Money vs. Vanguard Total Stock |
| Franklin vs. Aig Government Money | Franklin vs. Blackrock Government Bond | Franklin vs. John Hancock Government | Franklin vs. Dunham Porategovernment Bond |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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