Correlation Between Sp 500 and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Sp 500 and Franklin Growth 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 Sp 500 and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sp 500 2x and Franklin Growth Opportunities, you can compare the effects of market volatilities on Sp 500 and Franklin Growth 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 Sp 500 with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp 500 and Franklin Growth.
Diversification Opportunities for Sp 500 and Franklin Growth
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between RYCTX and Franklin is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Sp 500 2x and Franklin Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth Oppo and Sp 500 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 Sp 500 2x are associated (or correlated) with Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth Oppo has no effect on the direction of Sp 500 i.e., Sp 500 and Franklin Growth go up and down completely randomly.
Pair Corralation between Sp 500 and Franklin Growth
Assuming the 90 days horizon Sp 500 2x is expected to generate 1.24 times more return on investment than Franklin Growth. However, Sp 500 is 1.24 times more volatile than Franklin Growth Opportunities. It trades about 0.09 of its potential returns per unit of risk. Franklin Growth Opportunities is currently generating about 0.06 per unit of risk. If you would invest 18,310 in Sp 500 2x on September 12, 2024 and sell it today you would earn a total of 10,990 from holding Sp 500 2x or generate 60.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Sp 500 2x vs. Franklin Growth Opportunities
Performance |
| Timeline |
| Sp 500 2x |
| Franklin Growth Oppo |
Sp 500 and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sp 500 and Franklin Growth
The main advantage of trading using opposite Sp 500 and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp 500 position performs unexpectedly, Franklin Growth 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 Growth will offset losses from the drop in Franklin Growth's long position.| Sp 500 vs. Nasdaq 100 2x Strategy | Sp 500 vs. Nasdaq 100 2x Strategy | Sp 500 vs. Nasdaq 100 2x Strategy | Sp 500 vs. Ultra Nasdaq 100 Profunds |
| Franklin Growth vs. American Funds The | Franklin Growth vs. American Funds The | Franklin Growth vs. Growth Fund Of | Franklin Growth vs. Growth 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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