Correlation Between ReNew Energy and Franklin Utilities
Can any of the company-specific risk be diversified away by investing in both ReNew Energy and Franklin Utilities 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 ReNew Energy and Franklin Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ReNew Energy Global and Franklin Utilities Fund, you can compare the effects of market volatilities on ReNew Energy and Franklin Utilities 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 ReNew Energy with a short position of Franklin Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of ReNew Energy and Franklin Utilities.
Diversification Opportunities for ReNew Energy and Franklin Utilities
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ReNew and Franklin is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding ReNew Energy Global and Franklin Utilities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Utilities and ReNew Energy 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 ReNew Energy Global are associated (or correlated) with Franklin Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Utilities has no effect on the direction of ReNew Energy i.e., ReNew Energy and Franklin Utilities go up and down completely randomly.
Pair Corralation between ReNew Energy and Franklin Utilities
Assuming the 90 days horizon ReNew Energy is expected to generate 1.12 times less return on investment than Franklin Utilities. In addition to that, ReNew Energy is 12.63 times more volatile than Franklin Utilities Fund. It trades about 0.01 of its total potential returns per unit of risk. Franklin Utilities Fund is currently generating about 0.18 per unit of volatility. If you would invest 1,871 in Franklin Utilities Fund on August 29, 2024 and sell it today you would earn a total of 721.00 from holding Franklin Utilities Fund or generate 38.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ReNew Energy Global vs. Franklin Utilities Fund
Performance |
| Timeline |
| ReNew Energy Global |
| Franklin Utilities |
ReNew Energy and Franklin Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ReNew Energy and Franklin Utilities
The main advantage of trading using opposite ReNew Energy and Franklin Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ReNew Energy position performs unexpectedly, Franklin Utilities 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 Utilities will offset losses from the drop in Franklin Utilities' long position.| ReNew Energy vs. Renew Energy Global | ReNew Energy vs. Xos Equity Warrants | ReNew Energy vs. Microvast Holdings | ReNew Energy vs. AEye Inc |
| Franklin Utilities vs. John Hancock Financial | Franklin Utilities vs. Financials Ultrasector Profund | Franklin Utilities vs. Pimco Capital Sec | Franklin Utilities vs. Mesirow Financial Small |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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