Correlation Between Queens Road and Franklin High
Can any of the company-specific risk be diversified away by investing in both Queens Road 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 Queens Road and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Queens Road Small and Franklin High Yield, you can compare the effects of market volatilities on Queens Road 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 Queens Road with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Queens Road and Franklin High.
Diversification Opportunities for Queens Road and Franklin High
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Queens and Franklin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Queens Road Small 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 Queens Road 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 Queens Road Small 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 Queens Road i.e., Queens Road and Franklin High go up and down completely randomly.
Pair Corralation between Queens Road and Franklin High
Assuming the 90 days horizon Queens Road is expected to generate 1.13 times less return on investment than Franklin High. In addition to that, Queens Road is 3.87 times more volatile than Franklin High Yield. It trades about 0.02 of its total potential returns per unit of risk. Franklin High Yield is currently generating about 0.08 per unit of volatility. If you would invest 857.00 in Franklin High Yield on December 8, 2024 and sell it today you would earn a total of 45.00 from holding Franklin High Yield or generate 5.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Queens Road Small vs. Franklin High Yield
Performance |
| Timeline |
| Queens Road Small |
| Franklin High Yield |
Queens Road and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Queens Road and Franklin High
The main advantage of trading using opposite Queens Road and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Queens Road 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.| Queens Road vs. Arrow Managed Futures | Queens Road vs. Rbc Funds Trust | Queens Road vs. Legg Mason Bw | Queens Road vs. Eic Value Fund |
| Franklin High vs. Ridgeworth Seix Government | Franklin High vs. Us Government Securities | Franklin High vs. Nationwide Government Bond | Franklin High vs. Davis Government 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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