Correlation Between Aqr Small and Franklin International
Can any of the company-specific risk be diversified away by investing in both Aqr Small and Franklin International 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 Small and Franklin International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Small Cap and Franklin International Core, you can compare the effects of market volatilities on Aqr Small and Franklin International 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 Small with a short position of Franklin International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Small and Franklin International.
Diversification Opportunities for Aqr Small and Franklin International
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aqr and Franklin is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Small Cap and Franklin International Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin International and Aqr Small 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 Small Cap are associated (or correlated) with Franklin International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin International has no effect on the direction of Aqr Small i.e., Aqr Small and Franklin International go up and down completely randomly.
Pair Corralation between Aqr Small and Franklin International
Assuming the 90 days horizon Aqr Small Cap is expected to under-perform the Franklin International. In addition to that, Aqr Small is 1.44 times more volatile than Franklin International Core. It trades about -0.1 of its total potential returns per unit of risk. Franklin International Core is currently generating about 0.01 per unit of volatility. If you would invest 1,214 in Franklin International Core on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Franklin International Core or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aqr Small Cap vs. Franklin International Core
Performance |
| Timeline |
| Aqr Small Cap |
| Franklin International |
Aqr Small and Franklin International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Small and Franklin International
The main advantage of trading using opposite Aqr Small and Franklin International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Small position performs unexpectedly, Franklin International 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 International will offset losses from the drop in Franklin International's long position.| Aqr Small vs. Dunham Large Cap | Aqr Small vs. Jhancock Disciplined Value | Aqr Small vs. Fidelity Series 1000 | Aqr Small vs. Dana Large Cap |
| Franklin International vs. Mutual Of America | Franklin International vs. Siit Small Mid | Franklin International vs. Sp Smallcap 600 | Franklin International vs. Aqr 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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