Correlation Between Health Biotchnology and Franklin
Can any of the company-specific risk be diversified away by investing in both Health Biotchnology and Franklin 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 Health Biotchnology and Franklin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Health Biotchnology Portfolio and Franklin K2 Alternative, you can compare the effects of market volatilities on Health Biotchnology and Franklin 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 Health Biotchnology with a short position of Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Health Biotchnology and Franklin.
Diversification Opportunities for Health Biotchnology and Franklin
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Health and Franklin is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Health Biotchnology Portfolio and Franklin K2 Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin K2 Alternative and Health Biotchnology 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 Health Biotchnology Portfolio are associated (or correlated) with Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin K2 Alternative has no effect on the direction of Health Biotchnology i.e., Health Biotchnology and Franklin go up and down completely randomly.
Pair Corralation between Health Biotchnology and Franklin
If you would invest 1,199 in Franklin K2 Alternative on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Franklin K2 Alternative or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Health Biotchnology Portfolio vs. Franklin K2 Alternative
Performance |
| Timeline |
| Health Biotchnology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Franklin K2 Alternative |
Health Biotchnology and Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Health Biotchnology and Franklin
The main advantage of trading using opposite Health Biotchnology and Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Health Biotchnology position performs unexpectedly, Franklin 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 will offset losses from the drop in Franklin's long position.| Health Biotchnology vs. The National Tax Free | Health Biotchnology vs. Transamerica Intermediate Muni | Health Biotchnology vs. Blrc Sgy Mnp | Health Biotchnology vs. Franklin High Yield |
| Franklin vs. Franklin Mutual Beacon | Franklin vs. Templeton Developing Markets | Franklin vs. Franklin Mutual Global | Franklin 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |