Correlation Between Siit High and Franklin Federal
Can any of the company-specific risk be diversified away by investing in both Siit High and Franklin Federal 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 Federal 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 Federal Tax Free, you can compare the effects of market volatilities on Siit High and Franklin Federal 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 Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit High and Franklin Federal.
Diversification Opportunities for Siit High and Franklin Federal
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Siit and Franklin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Siit High Yield and Franklin Federal Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Federal Tax 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 Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Federal Tax has no effect on the direction of Siit High i.e., Siit High and Franklin Federal go up and down completely randomly.
Pair Corralation between Siit High and Franklin Federal
Assuming the 90 days horizon Siit High Yield is expected to generate 1.39 times more return on investment than Franklin Federal. However, Siit High is 1.39 times more volatile than Franklin Federal Tax Free. It trades about 0.12 of its potential returns per unit of risk. Franklin Federal Tax Free is currently generating about 0.11 per unit of risk. If you would invest 654.00 in Siit High Yield on September 4, 2024 and sell it today you would earn a total of 64.00 from holding Siit High Yield or generate 9.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Siit High Yield vs. Franklin Federal Tax Free
Performance |
| Timeline |
| Siit High Yield |
| Franklin Federal Tax |
Siit High and Franklin Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit High and Franklin Federal
The main advantage of trading using opposite Siit High and Franklin Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit High position performs unexpectedly, Franklin Federal 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 Federal will offset losses from the drop in Franklin Federal's long position.| Siit High vs. Simt Multi Asset Accumulation | Siit High vs. Saat Market Growth | Siit High vs. Simt Real Return | Siit High vs. Simt Small Cap |
| Franklin Federal vs. Franklin Mutual Beacon | Franklin Federal vs. Templeton Developing Markets | Franklin Federal vs. Franklin Mutual Global | Franklin Federal 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |