Correlation Between Hartford Multifactor and Franklin LibertyQ
Can any of the company-specific risk be diversified away by investing in both Hartford Multifactor and Franklin LibertyQ 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 Hartford Multifactor and Franklin LibertyQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartford Multifactor Emerging and Franklin LibertyQ Small, you can compare the effects of market volatilities on Hartford Multifactor and Franklin LibertyQ 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 Hartford Multifactor with a short position of Franklin LibertyQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartford Multifactor and Franklin LibertyQ.
Diversification Opportunities for Hartford Multifactor and Franklin LibertyQ
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hartford and Franklin is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hartford Multifactor Emerging and Franklin LibertyQ Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin LibertyQ Small and Hartford Multifactor 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 Hartford Multifactor Emerging are associated (or correlated) with Franklin LibertyQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin LibertyQ Small has no effect on the direction of Hartford Multifactor i.e., Hartford Multifactor and Franklin LibertyQ go up and down completely randomly.
Pair Corralation between Hartford Multifactor and Franklin LibertyQ
Given the investment horizon of 90 days Hartford Multifactor is expected to generate 1.24 times less return on investment than Franklin LibertyQ. But when comparing it to its historical volatility, Hartford Multifactor Emerging is 1.36 times less risky than Franklin LibertyQ. It trades about 0.07 of its potential returns per unit of risk. Franklin LibertyQ Small is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,198 in Franklin LibertyQ Small on September 16, 2024 and sell it today you would earn a total of 1,221 from holding Franklin LibertyQ Small or generate 38.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartford Multifactor Emerging vs. Franklin LibertyQ Small
Performance |
| Timeline |
| Hartford Multifactor |
| Franklin LibertyQ Small |
Hartford Multifactor and Franklin LibertyQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartford Multifactor and Franklin LibertyQ
The main advantage of trading using opposite Hartford Multifactor and Franklin LibertyQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartford Multifactor position performs unexpectedly, Franklin LibertyQ 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 LibertyQ will offset losses from the drop in Franklin LibertyQ's long position.| Hartford Multifactor vs. Global X MSCI | Hartford Multifactor vs. Global X Alternative | Hartford Multifactor vs. iShares Emerging Markets | Hartford Multifactor vs. Global X SuperDividend |
| Franklin LibertyQ vs. Franklin LibertyQ Mid | Franklin LibertyQ vs. Franklin LibertyQ Equity | Franklin LibertyQ vs. Franklin Liberty Short | Franklin LibertyQ vs. Franklin Liberty Investment |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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