Correlation Between Touchstone International and Franklin Double
Can any of the company-specific risk be diversified away by investing in both Touchstone International and Franklin Double 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 Touchstone International and Franklin Double into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone International Equity and Franklin Double Tax Free, you can compare the effects of market volatilities on Touchstone International and Franklin Double 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 Touchstone International with a short position of Franklin Double. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone International and Franklin Double.
Diversification Opportunities for Touchstone International and Franklin Double
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Touchstone and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone International Equit and Franklin Double Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Double Tax and Touchstone International 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 Touchstone International Equity are associated (or correlated) with Franklin Double. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Double Tax has no effect on the direction of Touchstone International i.e., Touchstone International and Franklin Double go up and down completely randomly.
Pair Corralation between Touchstone International and Franklin Double
If you would invest (100.00) in Franklin Double Tax Free on September 1, 2024 and sell it today you would earn a total of 100.00 from holding Franklin Double Tax Free or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Touchstone International Equit vs. Franklin Double Tax Free
Performance |
| Timeline |
| Touchstone International |
| Franklin Double Tax |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Touchstone International and Franklin Double Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone International and Franklin Double
The main advantage of trading using opposite Touchstone International and Franklin Double positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone International position performs unexpectedly, Franklin Double 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 Double will offset losses from the drop in Franklin Double's long position.The idea behind Touchstone International Equity and Franklin Double Tax Free pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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