Correlation Between Thornburg Investment and Franklin Income
Can any of the company-specific risk be diversified away by investing in both Thornburg Investment and Franklin Income 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 Thornburg Investment and Franklin Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thornburg Investment Income and Franklin Income Fund, you can compare the effects of market volatilities on Thornburg Investment and Franklin Income 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 Thornburg Investment with a short position of Franklin Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg Investment and Franklin Income.
Diversification Opportunities for Thornburg Investment and Franklin Income
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Thornburg and Franklin is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Investment Income and Franklin Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Income and Thornburg Investment 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 Thornburg Investment Income are associated (or correlated) with Franklin Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Income has no effect on the direction of Thornburg Investment i.e., Thornburg Investment and Franklin Income go up and down completely randomly.
Pair Corralation between Thornburg Investment and Franklin Income
Assuming the 90 days horizon Thornburg Investment Income is expected to generate 1.55 times more return on investment than Franklin Income. However, Thornburg Investment is 1.55 times more volatile than Franklin Income Fund. It trades about 0.1 of its potential returns per unit of risk. Franklin Income Fund is currently generating about 0.1 per unit of risk. If you would invest 2,279 in Thornburg Investment Income on September 14, 2024 and sell it today you would earn a total of 298.00 from holding Thornburg Investment Income or generate 13.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thornburg Investment Income vs. Franklin Income Fund
Performance |
| Timeline |
| Thornburg Investment |
| Franklin Income |
Thornburg Investment and Franklin Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg Investment and Franklin Income
The main advantage of trading using opposite Thornburg Investment and Franklin Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Investment position performs unexpectedly, Franklin Income 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 Income will offset losses from the drop in Franklin Income's long position.| Thornburg Investment vs. Franklin Income Fund | Thornburg Investment vs. Jpmorgan Income Builder | Thornburg Investment vs. First Eagle Global | Thornburg Investment vs. Ivy Asset Strategy |
| Franklin Income vs. Guidemark Large Cap | Franklin Income vs. Qs Large Cap | Franklin Income vs. Washington Mutual Investors | Franklin Income vs. T Rowe Price |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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