Correlation Between Siit High and Franklin New
Can any of the company-specific risk be diversified away by investing in both Siit High and Franklin New 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 Siit High and Franklin New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit High Yield and Franklin New York, you can compare the effects of market volatilities on Siit High and Franklin New 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 Siit High with a short position of Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit High and Franklin New.
Diversification Opportunities for Siit High and Franklin New
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Siit and Franklin is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Siit High Yield and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York and Siit 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 Siit High Yield are associated (or correlated) with Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Siit High i.e., Siit High and Franklin New go up and down completely randomly.
Pair Corralation between Siit High and Franklin New
Assuming the 90 days horizon Siit High Yield is expected to generate 1.09 times more return on investment than Franklin New. However, Siit High is 1.09 times more volatile than Franklin New York. It trades about 0.17 of its potential returns per unit of risk. Franklin New York is currently generating about 0.06 per unit of risk. If you would invest 644.00 in Siit High Yield on September 14, 2024 and sell it today you would earn a total of 75.00 from holding Siit High Yield or generate 11.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit High Yield vs. Franklin New York
Performance |
| Timeline |
| Siit High Yield |
| Franklin New York |
Siit High and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit High and Franklin New
The main advantage of trading using opposite Siit High and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit High position performs unexpectedly, Franklin New 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 New will offset losses from the drop in Franklin New's long position.| Siit High vs. Artisan High Income | Siit High vs. Sit Emerging Markets | Siit High vs. Sit International Equity | Siit High vs. Stet Intermediate Term |
| Franklin New vs. Franklin Federal Limited Term | Franklin New vs. Delaware Investments Ultrashort | Franklin New vs. Angel Oak Ultrashort | Franklin New vs. Boston Partners Longshort |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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