Correlation Between Aqr Sustainable and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Aqr Sustainable and Franklin Growth 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 Sustainable and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Sustainable Long Short and Franklin Growth Opportunities, you can compare the effects of market volatilities on Aqr Sustainable and Franklin Growth 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 Sustainable with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Sustainable and Franklin Growth.
Diversification Opportunities for Aqr Sustainable and Franklin Growth
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aqr and Franklin is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Sustainable Long Short and Franklin Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth Oppo and Aqr Sustainable 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 Sustainable Long Short are associated (or correlated) with Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth Oppo has no effect on the direction of Aqr Sustainable i.e., Aqr Sustainable and Franklin Growth go up and down completely randomly.
Pair Corralation between Aqr Sustainable and Franklin Growth
Assuming the 90 days horizon Aqr Sustainable is expected to generate 2.14 times less return on investment than Franklin Growth. But when comparing it to its historical volatility, Aqr Sustainable Long Short is 1.57 times less risky than Franklin Growth. It trades about 0.1 of its potential returns per unit of risk. Franklin Growth Opportunities is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 5,647 in Franklin Growth Opportunities on November 3, 2024 and sell it today you would earn a total of 211.00 from holding Franklin Growth Opportunities or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Sustainable Long Short vs. Franklin Growth Opportunities
Performance |
| Timeline |
| Aqr Sustainable Long |
| Franklin Growth Oppo |
Aqr Sustainable and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Sustainable and Franklin Growth
The main advantage of trading using opposite Aqr Sustainable and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Sustainable position performs unexpectedly, Franklin Growth 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 Growth will offset losses from the drop in Franklin Growth's long position.| Aqr Sustainable vs. Fidelity Advisor Energy | Aqr Sustainable vs. Oil Gas Ultrasector | Aqr Sustainable vs. Clearbridge Energy Mlp | Aqr Sustainable vs. World Energy Fund |
| Franklin Growth vs. Gmo Global Equity | Franklin Growth vs. Old Westbury Fixed | Franklin Growth vs. Aqr Long Short Equity | Franklin Growth vs. Qs Global Equity |
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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