Correlation Between Federated Strategic and Franklin Adjustable
Can any of the company-specific risk be diversified away by investing in both Federated Strategic and Franklin Adjustable 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 Federated Strategic and Franklin Adjustable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Strategic Income and Franklin Adjustable Government, you can compare the effects of market volatilities on Federated Strategic and Franklin Adjustable 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 Federated Strategic with a short position of Franklin Adjustable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Strategic and Franklin Adjustable.
Diversification Opportunities for Federated Strategic and Franklin Adjustable
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Franklin is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Federated Strategic Income and Franklin Adjustable Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Adjustable and Federated Strategic 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 Federated Strategic Income are associated (or correlated) with Franklin Adjustable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Adjustable has no effect on the direction of Federated Strategic i.e., Federated Strategic and Franklin Adjustable go up and down completely randomly.
Pair Corralation between Federated Strategic and Franklin Adjustable
Assuming the 90 days horizon Federated Strategic Income is expected to generate 2.03 times more return on investment than Franklin Adjustable. However, Federated Strategic is 2.03 times more volatile than Franklin Adjustable Government. It trades about 0.04 of its potential returns per unit of risk. Franklin Adjustable Government is currently generating about 0.0 per unit of risk. If you would invest 826.00 in Federated Strategic Income on September 12, 2024 and sell it today you would earn a total of 5.00 from holding Federated Strategic Income or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Strategic Income vs. Franklin Adjustable Government
Performance |
| Timeline |
| Federated Strategic |
| Franklin Adjustable |
Federated Strategic and Franklin Adjustable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Strategic and Franklin Adjustable
The main advantage of trading using opposite Federated Strategic and Franklin Adjustable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Strategic position performs unexpectedly, Franklin Adjustable 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 Adjustable will offset losses from the drop in Franklin Adjustable's long position.| Federated Strategic vs. Inverse Government Long | Federated Strategic vs. Elfun Government Money | Federated Strategic vs. Long Term Government Fund | Federated Strategic vs. Hsbc Government Money |
| Franklin Adjustable vs. SCOR PK | Franklin Adjustable vs. Morningstar Unconstrained Allocation | Franklin Adjustable vs. Via Renewables | Franklin Adjustable vs. Bondbloxx ETF Trust |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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