Correlation Between Clearbridge Appreciation and Franklin California
Can any of the company-specific risk be diversified away by investing in both Clearbridge Appreciation and Franklin California 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 Clearbridge Appreciation and Franklin California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Appreciation Fund and Franklin California Tax Free, you can compare the effects of market volatilities on Clearbridge Appreciation and Franklin California 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 Clearbridge Appreciation with a short position of Franklin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Appreciation and Franklin California.
Diversification Opportunities for Clearbridge Appreciation and Franklin California
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clearbridge and Franklin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Appreciation Fund and Franklin California Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin California Tax and Clearbridge Appreciation 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 Clearbridge Appreciation Fund are associated (or correlated) with Franklin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin California Tax has no effect on the direction of Clearbridge Appreciation i.e., Clearbridge Appreciation and Franklin California go up and down completely randomly.
Pair Corralation between Clearbridge Appreciation and Franklin California
Assuming the 90 days horizon Clearbridge Appreciation Fund is expected to under-perform the Franklin California. In addition to that, Clearbridge Appreciation is 5.11 times more volatile than Franklin California Tax Free. It trades about -0.1 of its total potential returns per unit of risk. Franklin California Tax Free is currently generating about -0.05 per unit of volatility. If you would invest 688.00 in Franklin California Tax Free on November 27, 2024 and sell it today you would lose (5.00) from holding Franklin California Tax Free or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Appreciation Fund vs. Franklin California Tax Free
Performance |
| Timeline |
| Clearbridge Appreciation |
| Franklin California Tax |
Clearbridge Appreciation and Franklin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Appreciation and Franklin California
The main advantage of trading using opposite Clearbridge Appreciation and Franklin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Appreciation position performs unexpectedly, Franklin California 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 California will offset losses from the drop in Franklin California's long position.| Clearbridge Appreciation vs. Siit High Yield | Clearbridge Appreciation vs. Pace High Yield | Clearbridge Appreciation vs. City National Rochdale | Clearbridge Appreciation vs. T Rowe Price |
| Franklin California vs. Franklin Mutual Beacon | Franklin California vs. Templeton Developing Markets | Franklin California vs. Franklin Mutual Global | Franklin California vs. Franklin Mutual Global |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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