Correlation Between Aig Government and Franklin California
Can any of the company-specific risk be diversified away by investing in both Aig Government and Franklin California 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 Aig Government and Franklin California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aig Government Money and Franklin California High, you can compare the effects of market volatilities on Aig Government and Franklin California 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 Aig Government with a short position of Franklin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Franklin California.
Diversification Opportunities for Aig Government and Franklin California
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aig and Franklin is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Franklin California High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin California High and Aig Government 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 Aig Government Money are associated (or correlated) with Franklin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin California High has no effect on the direction of Aig Government i.e., Aig Government and Franklin California go up and down completely randomly.
Pair Corralation between Aig Government and Franklin California
Assuming the 90 days horizon Aig Government is expected to generate 1.1 times less return on investment than Franklin California. But when comparing it to its historical volatility, Aig Government Money is 1.3 times less risky than Franklin California. It trades about 0.56 of its potential returns per unit of risk. Franklin California High is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 992.00 in Franklin California High on September 12, 2024 and sell it today you would earn a total of 13.00 from holding Franklin California High or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. Franklin California High
Performance |
| Timeline |
| Aig Government Money |
| Franklin California High |
Aig Government and Franklin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Franklin California
The main advantage of trading using opposite Aig Government and Franklin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government position performs unexpectedly, Franklin California 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 California will offset losses from the drop in Franklin California's long position.| Aig Government vs. SCOR PK | Aig Government vs. Morningstar Unconstrained Allocation | Aig Government vs. Via Renewables | Aig Government vs. Bondbloxx ETF Trust |
| Franklin California vs. Alliancebernstein National Municipal | Franklin California vs. Versatile Bond Portfolio | Franklin California vs. T Rowe Price | Franklin California vs. The National Tax Free |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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