Correlation Between Aqr Diversified and Franklin California
Can any of the company-specific risk be diversified away by investing in both Aqr Diversified and Franklin California 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 Aqr Diversified and Franklin California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Diversified Arbitrage and Franklin California Tax Free, you can compare the effects of market volatilities on Aqr Diversified and Franklin California 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 Aqr Diversified with a short position of Franklin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Diversified and Franklin California.
Diversification Opportunities for Aqr Diversified and Franklin California
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aqr and Franklin is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Diversified Arbitrage and Franklin California Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin California Tax and Aqr Diversified 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 Aqr Diversified Arbitrage are associated (or correlated) with Franklin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin California Tax has no effect on the direction of Aqr Diversified i.e., Aqr Diversified and Franklin California go up and down completely randomly.
Pair Corralation between Aqr Diversified and Franklin California
Assuming the 90 days horizon Aqr Diversified Arbitrage is expected to generate 0.42 times more return on investment than Franklin California. However, Aqr Diversified Arbitrage is 2.41 times less risky than Franklin California. It trades about 0.14 of its potential returns per unit of risk. Franklin California Tax Free is currently generating about 0.01 per unit of risk. If you would invest 1,135 in Aqr Diversified Arbitrage on January 10, 2025 and sell it today you would earn a total of 104.00 from holding Aqr Diversified Arbitrage or generate 9.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aqr Diversified Arbitrage vs. Franklin California Tax Free
Performance |
| Timeline |
| Aqr Diversified Arbitrage |
| Franklin California Tax |
Aqr Diversified and Franklin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Diversified and Franklin California
The main advantage of trading using opposite Aqr Diversified and Franklin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Diversified position performs unexpectedly, Franklin California 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 California will offset losses from the drop in Franklin California's long position.| Aqr Diversified vs. Pnc Emerging Markets | Aqr Diversified vs. Barings Emerging Markets | Aqr Diversified vs. Touchstone Sands Capital | Aqr Diversified vs. Legg Mason Partners |
| Franklin California vs. Franklin Mutual Beacon | Franklin California vs. Templeton Developing Markets | Franklin California vs. Franklin Mutual Global | Franklin California vs. Franklin Mutual Global |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |