Correlation Between International Growth and Franklin Natural
Can any of the company-specific risk be diversified away by investing in both International Growth and Franklin Natural 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 International Growth and Franklin Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Growth And and Franklin Natural Resources, you can compare the effects of market volatilities on International Growth and Franklin Natural 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 International Growth with a short position of Franklin Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Growth and Franklin Natural.
Diversification Opportunities for International Growth and Franklin Natural
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between International and Franklin is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding International Growth And and Franklin Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Natural Res and International Growth 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 International Growth And are associated (or correlated) with Franklin Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Natural Res has no effect on the direction of International Growth i.e., International Growth and Franklin Natural go up and down completely randomly.
Pair Corralation between International Growth and Franklin Natural
Assuming the 90 days horizon International Growth And is expected to under-perform the Franklin Natural. But the mutual fund apears to be less risky and, when comparing its historical volatility, International Growth And is 1.12 times less risky than Franklin Natural. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Franklin Natural Resources is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 3,049 in Franklin Natural Resources on August 31, 2024 and sell it today you would earn a total of 110.00 from holding Franklin Natural Resources or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Growth And vs. Franklin Natural Resources
Performance |
| Timeline |
| International Growth And |
| Franklin Natural Res |
International Growth and Franklin Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Growth and Franklin Natural
The main advantage of trading using opposite International Growth and Franklin Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Growth position performs unexpectedly, Franklin Natural 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 Natural will offset losses from the drop in Franklin Natural's long position.| International Growth vs. Ivy Energy Fund | International Growth vs. Franklin Natural Resources | International Growth vs. Oil Gas Ultrasector | International Growth vs. Fidelity Advisor Energy |
| Franklin Natural vs. Lord Abbett Government | Franklin Natural vs. Government Securities Fund | Franklin Natural vs. Us Government Securities | Franklin Natural vs. Aig Government Money |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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