Correlation Between Clearbridge Small and Franklin Convertible
Can any of the company-specific risk be diversified away by investing in both Clearbridge Small and Franklin Convertible 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 Small and Franklin Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Small Cap and Franklin Vertible Securities, you can compare the effects of market volatilities on Clearbridge Small and Franklin Convertible 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 Small with a short position of Franklin Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Small and Franklin Convertible.
Diversification Opportunities for Clearbridge Small and Franklin Convertible
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Clearbridge and Franklin is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Small Cap and Franklin Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Convertible and Clearbridge Small 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 Small Cap are associated (or correlated) with Franklin Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Convertible has no effect on the direction of Clearbridge Small i.e., Clearbridge Small and Franklin Convertible go up and down completely randomly.
Pair Corralation between Clearbridge Small and Franklin Convertible
Assuming the 90 days horizon Clearbridge Small is expected to generate 1.1 times less return on investment than Franklin Convertible. In addition to that, Clearbridge Small is 2.39 times more volatile than Franklin Vertible Securities. It trades about 0.04 of its total potential returns per unit of risk. Franklin Vertible Securities is currently generating about 0.12 per unit of volatility. If you would invest 1,925 in Franklin Vertible Securities on August 31, 2024 and sell it today you would earn a total of 466.00 from holding Franklin Vertible Securities or generate 24.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Clearbridge Small Cap vs. Franklin Vertible Securities
Performance |
| Timeline |
| Clearbridge Small Cap |
| Franklin Convertible |
Clearbridge Small and Franklin Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Small and Franklin Convertible
The main advantage of trading using opposite Clearbridge Small and Franklin Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Small position performs unexpectedly, Franklin Convertible 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 Convertible will offset losses from the drop in Franklin Convertible's long position.| Clearbridge Small vs. The Hartford Midcap | Clearbridge Small vs. Mfs Emerging Markets | Clearbridge Small vs. Wells Fargo Special | Clearbridge Small vs. Baron Emerging Markets |
| Franklin Convertible vs. Ab Value Fund | Franklin Convertible vs. Rbc Microcap Value | Franklin Convertible vs. T Rowe Price | Franklin Convertible vs. Arrow Managed Futures |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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