Correlation Between Nasdaq-100(r) and Franklin Oregon
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Franklin Oregon 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 Nasdaq-100(r) and Franklin Oregon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Franklin Oregon Tax Free, you can compare the effects of market volatilities on Nasdaq-100(r) and Franklin Oregon 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 Nasdaq-100(r) with a short position of Franklin Oregon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Franklin Oregon.
Diversification Opportunities for Nasdaq-100(r) and Franklin Oregon
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nasdaq-100(r) and Franklin is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Franklin Oregon Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Oregon Tax and Nasdaq-100(r) 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 Nasdaq 100 2x Strategy are associated (or correlated) with Franklin Oregon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Oregon Tax has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Franklin Oregon go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Franklin Oregon
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 8.97 times more return on investment than Franklin Oregon. However, Nasdaq-100(r) is 8.97 times more volatile than Franklin Oregon Tax Free. It trades about 0.05 of its potential returns per unit of risk. Franklin Oregon Tax Free is currently generating about 0.14 per unit of risk. If you would invest 55,222 in Nasdaq 100 2x Strategy on November 27, 2024 and sell it today you would earn a total of 883.00 from holding Nasdaq 100 2x Strategy or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Franklin Oregon Tax Free
Performance |
| Timeline |
| Nasdaq 100 2x |
| Franklin Oregon Tax |
Nasdaq-100(r) and Franklin Oregon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Franklin Oregon
The main advantage of trading using opposite Nasdaq-100(r) and Franklin Oregon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Franklin Oregon 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 Oregon will offset losses from the drop in Franklin Oregon's long position.| Nasdaq-100(r) vs. Sp 500 2x | Nasdaq-100(r) vs. Inverse Nasdaq 100 2x | Nasdaq-100(r) vs. Inverse Sp 500 | Nasdaq-100(r) vs. Ultra Nasdaq 100 Profunds |
| Franklin Oregon vs. Guidemark Large Cap | Franklin Oregon vs. Tax Managed Large Cap | Franklin Oregon vs. Balanced Allocation Fund | Franklin Oregon vs. T Rowe Price |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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