Correlation Between Us Government and Ftfa Franklin
Can any of the company-specific risk be diversified away by investing in both Us Government and Ftfa 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 Us Government and Ftfa Franklin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Securities and Ftfa Franklin Templeton Growth, you can compare the effects of market volatilities on Us Government and Ftfa 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 Us Government with a short position of Ftfa Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Ftfa Franklin.
Diversification Opportunities for Us Government and Ftfa Franklin
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RGVAX and Ftfa is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities and Ftfa Franklin Templeton Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ftfa Franklin Templeton and Us Government 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 Us Government Securities are associated (or correlated) with Ftfa Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ftfa Franklin Templeton has no effect on the direction of Us Government i.e., Us Government and Ftfa Franklin go up and down completely randomly.
Pair Corralation between Us Government and Ftfa Franklin
Assuming the 90 days horizon Us Government is expected to generate 6.47 times less return on investment than Ftfa Franklin. But when comparing it to its historical volatility, Us Government Securities is 1.57 times less risky than Ftfa Franklin. It trades about 0.03 of its potential returns per unit of risk. Ftfa Franklin Templeton Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,701 in Ftfa Franklin Templeton Growth on September 12, 2024 and sell it today you would earn a total of 420.00 from holding Ftfa Franklin Templeton Growth or generate 24.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Government Securities vs. Ftfa Franklin Templeton Growth
Performance |
| Timeline |
| Us Government Securities |
| Ftfa Franklin Templeton |
Us Government and Ftfa Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Ftfa Franklin
The main advantage of trading using opposite Us Government and Ftfa Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government position performs unexpectedly, Ftfa 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 Ftfa Franklin will offset losses from the drop in Ftfa Franklin's long position.| Us Government vs. Vanguard Gnma Fund | Us Government vs. Vanguard Intermediate Term Government | Us Government vs. Us Government Securities | Us Government vs. Us Government Securities |
| Ftfa Franklin vs. Income Fund Of | Ftfa Franklin vs. Income Fund Of | Ftfa Franklin vs. Income Fund Of | Ftfa Franklin vs. Income Fund Of |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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