Correlation Between Sierra E and Franklin
Can any of the company-specific risk be diversified away by investing in both Sierra E 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 Sierra E and Franklin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sierra E Retirement and Franklin Government Money, you can compare the effects of market volatilities on Sierra E 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 Sierra E with a short position of Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sierra E and Franklin.
Diversification Opportunities for Sierra E and Franklin
Pay attention - limited upside
The 3 months correlation between Sierra and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sierra E Retirement and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money and Sierra E 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 Sierra E Retirement 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 Government Money has no effect on the direction of Sierra E i.e., Sierra E and Franklin go up and down completely randomly.
Pair Corralation between Sierra E and Franklin
Assuming the 90 days horizon Sierra E is expected to generate 1.18 times less return on investment than Franklin. In addition to that, Sierra E is 2.6 times more volatile than Franklin Government Money. It trades about 0.04 of its total potential returns per unit of risk. Franklin Government Money is currently generating about 0.13 per unit of volatility. If you would invest 95.00 in Franklin Government Money on December 12, 2024 and sell it today you would earn a total of 5.00 from holding Franklin Government Money or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.65% |
| Values | Daily Returns |
Sierra E Retirement vs. Franklin Government Money
Performance |
| Timeline |
| Sierra E Retirement |
| Franklin Government Money |
Sierra E and Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sierra E and Franklin
The main advantage of trading using opposite Sierra E and Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sierra E 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.| Sierra E vs. Vy Clarion Real | ||
| Sierra E vs. Janus Global Real | ||
| Sierra E vs. T Rowe Price | ||
| Sierra E vs. Neuberger Berman Real |
| Franklin vs. Old Westbury Municipal | ||
| Franklin vs. Us Government Securities | ||
| Franklin vs. Franklin Adjustable Government | ||
| Franklin vs. Baird Quality Intermediate |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |