Correlation Between Mid Cap and Franklin Moderate
Can any of the company-specific risk be diversified away by investing in both Mid Cap and Franklin Moderate 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 Mid Cap and Franklin Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap 15x Strategy and Franklin Moderate Allocation, you can compare the effects of market volatilities on Mid Cap and Franklin Moderate 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 Mid Cap with a short position of Franklin Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Franklin Moderate.
Diversification Opportunities for Mid Cap and Franklin Moderate
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mid and Franklin is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x Strategy and Franklin Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Moderate and Mid Cap 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 Mid Cap 15x Strategy are associated (or correlated) with Franklin Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Moderate has no effect on the direction of Mid Cap i.e., Mid Cap and Franklin Moderate go up and down completely randomly.
Pair Corralation between Mid Cap and Franklin Moderate
Assuming the 90 days horizon Mid Cap 15x Strategy is expected to generate 3.09 times more return on investment than Franklin Moderate. However, Mid Cap is 3.09 times more volatile than Franklin Moderate Allocation. It trades about 0.06 of its potential returns per unit of risk. Franklin Moderate Allocation is currently generating about 0.11 per unit of risk. If you would invest 9,657 in Mid Cap 15x Strategy on September 13, 2024 and sell it today you would earn a total of 4,849 from holding Mid Cap 15x Strategy or generate 50.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mid Cap 15x Strategy vs. Franklin Moderate Allocation
Performance |
| Timeline |
| Mid Cap 15x |
| Franklin Moderate |
Mid Cap and Franklin Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid Cap and Franklin Moderate
The main advantage of trading using opposite Mid Cap and Franklin Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Cap position performs unexpectedly, Franklin Moderate 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 Moderate will offset losses from the drop in Franklin Moderate's long position.| Mid Cap vs. Basic Materials Fund | Mid Cap vs. Basic Materials Fund | Mid Cap vs. Banking Fund Class | Mid Cap vs. Basic Materials Fund |
| Franklin Moderate vs. Nasdaq 100 2x Strategy | Franklin Moderate vs. Black Oak Emerging | Franklin Moderate vs. Mid Cap 15x Strategy | Franklin Moderate vs. Artisan Emerging Markets |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |