Correlation Between Simt High and Franklin Founding
Can any of the company-specific risk be diversified away by investing in both Simt High and Franklin Founding 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 Simt High and Franklin Founding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt High Yield and Franklin Founding Funds, you can compare the effects of market volatilities on Simt High and Franklin Founding 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 Simt High with a short position of Franklin Founding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt High and Franklin Founding.
Diversification Opportunities for Simt High and Franklin Founding
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simt and Franklin is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Simt High Yield and Franklin Founding Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Founding Funds and Simt High 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 Simt High Yield are associated (or correlated) with Franklin Founding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Founding Funds has no effect on the direction of Simt High i.e., Simt High and Franklin Founding go up and down completely randomly.
Pair Corralation between Simt High and Franklin Founding
Assuming the 90 days horizon Simt High Yield is expected to generate 0.31 times more return on investment than Franklin Founding. However, Simt High Yield is 3.19 times less risky than Franklin Founding. It trades about -0.26 of its potential returns per unit of risk. Franklin Founding Funds is currently generating about -0.19 per unit of risk. If you would invest 521.00 in Simt High Yield on October 10, 2024 and sell it today you would lose (5.00) from holding Simt High Yield or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt High Yield vs. Franklin Founding Funds
Performance |
| Timeline |
| Simt High Yield |
| Franklin Founding Funds |
Simt High and Franklin Founding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt High and Franklin Founding
The main advantage of trading using opposite Simt High and Franklin Founding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt High position performs unexpectedly, Franklin Founding 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 Founding will offset losses from the drop in Franklin Founding's long position.| Simt High vs. Dreyfus High Yield | Simt High vs. Blackrock High Yield | Simt High vs. Jpmorgan High Yield | Simt High vs. Federated High Yield |
| Franklin Founding vs. Dunham High Yield | Franklin Founding vs. Catalystsmh High Income | Franklin Founding vs. Msift High Yield | Franklin Founding vs. Inverse High Yield |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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