Correlation Between Tax-exempt Fund and Franklin Natural
Can any of the company-specific risk be diversified away by investing in both Tax-exempt Fund and Franklin Natural 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 Tax-exempt Fund and Franklin Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tax Exempt Fund Of and Franklin Natural Resources, you can compare the effects of market volatilities on Tax-exempt Fund and Franklin Natural 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 Tax-exempt Fund with a short position of Franklin Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tax-exempt Fund and Franklin Natural.
Diversification Opportunities for Tax-exempt Fund and Franklin Natural
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tax-exempt and Franklin is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Tax Exempt Fund Of and Franklin Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Natural Res and Tax-exempt Fund 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 Tax Exempt Fund Of are associated (or correlated) with Franklin Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Natural Res has no effect on the direction of Tax-exempt Fund i.e., Tax-exempt Fund and Franklin Natural go up and down completely randomly.
Pair Corralation between Tax-exempt Fund and Franklin Natural
Assuming the 90 days horizon Tax-exempt Fund is expected to generate 1.27 times less return on investment than Franklin Natural. But when comparing it to its historical volatility, Tax Exempt Fund Of is 4.65 times less risky than Franklin Natural. It trades about 0.19 of its potential returns per unit of risk. Franklin Natural Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,712 in Franklin Natural Resources on August 25, 2024 and sell it today you would earn a total of 391.00 from holding Franklin Natural Resources or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tax Exempt Fund Of vs. Franklin Natural Resources
Performance |
| Timeline |
| Tax Exempt Fund |
| Franklin Natural Res |
Tax-exempt Fund and Franklin Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tax-exempt Fund and Franklin Natural
The main advantage of trading using opposite Tax-exempt Fund and Franklin Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tax-exempt Fund position performs unexpectedly, Franklin Natural 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 Natural will offset losses from the drop in Franklin Natural's long position.| Tax-exempt Fund vs. Franklin Natural Resources | Tax-exempt Fund vs. Calvert Global Energy | Tax-exempt Fund vs. Dreyfus Natural Resources | Tax-exempt Fund vs. Oil Gas Ultrasector |
| Franklin Natural vs. Franklin Mutual Beacon | Franklin Natural vs. Templeton Developing Markets | Franklin Natural vs. Franklin Mutual Global | Franklin Natural 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |