Correlation Between State Street and Franklin High
Can any of the company-specific risk be diversified away by investing in both State Street and Franklin High 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 State Street and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Target and Franklin High Yield, you can compare the effects of market volatilities on State Street and Franklin High 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 State Street with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Franklin High.
Diversification Opportunities for State Street and Franklin High
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between State and Franklin is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding State Street Target and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield and State Street 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 State Street Target are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Yield has no effect on the direction of State Street i.e., State Street and Franklin High go up and down completely randomly.
Pair Corralation between State Street and Franklin High
Assuming the 90 days horizon State Street is expected to generate 3.46 times less return on investment than Franklin High. In addition to that, State Street is 3.33 times more volatile than Franklin High Yield. It trades about 0.04 of its total potential returns per unit of risk. Franklin High Yield is currently generating about 0.42 per unit of volatility. If you would invest 905.00 in Franklin High Yield on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Franklin High Yield or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Target vs. Franklin High Yield
Performance |
| Timeline |
| State Street Target |
| Franklin High Yield |
State Street and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Franklin High
The main advantage of trading using opposite State Street and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Franklin High 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 High will offset losses from the drop in Franklin High's long position.| State Street vs. Artisan Thematic Fund | State Street vs. T Rowe Price | State Street vs. Rbb Fund | State Street vs. Commonwealth Global Fund |
| Franklin High vs. Cref Money Market | Franklin High vs. Chestnut Street Exchange | Franklin High vs. Aig Government Money | Franklin High vs. Matson Money Equity |
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.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |