Correlation Between Simt High and Franklin Louisiana
Can any of the company-specific risk be diversified away by investing in both Simt High and Franklin Louisiana 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 Louisiana 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 Louisiana Tax Free, you can compare the effects of market volatilities on Simt High and Franklin Louisiana 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 Louisiana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt High and Franklin Louisiana.
Diversification Opportunities for Simt High and Franklin Louisiana
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simt and Franklin is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Simt High Yield and Franklin Louisiana Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Louisiana Tax 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 Louisiana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Louisiana Tax has no effect on the direction of Simt High i.e., Simt High and Franklin Louisiana go up and down completely randomly.
Pair Corralation between Simt High and Franklin Louisiana
Assuming the 90 days horizon Simt High Yield is expected to generate 1.19 times more return on investment than Franklin Louisiana. However, Simt High is 1.19 times more volatile than Franklin Louisiana Tax Free. It trades about 0.09 of its potential returns per unit of risk. Franklin Louisiana Tax Free is currently generating about 0.04 per unit of risk. If you would invest 449.00 in Simt High Yield on October 12, 2024 and sell it today you would earn a total of 66.00 from holding Simt High Yield or generate 14.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt High Yield vs. Franklin Louisiana Tax Free
Performance |
| Timeline |
| Simt High Yield |
| Franklin Louisiana Tax |
Simt High and Franklin Louisiana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt High and Franklin Louisiana
The main advantage of trading using opposite Simt High and Franklin Louisiana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt High position performs unexpectedly, Franklin Louisiana 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 Louisiana will offset losses from the drop in Franklin Louisiana's long position.| Simt High vs. Rbb Fund | Simt High vs. Small Pany Growth | Simt High vs. Ab New York | Simt High vs. Vy Franklin Income |
| Franklin Louisiana vs. Pax High Yield | Franklin Louisiana vs. Strategic Advisers Income | Franklin Louisiana vs. Pace High Yield | Franklin Louisiana vs. Simt 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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