Correlation Between Towpath Technology and Franklin Strategic
Can any of the company-specific risk be diversified away by investing in both Towpath Technology and Franklin Strategic 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 Towpath Technology and Franklin Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Towpath Technology and Franklin Strategic Series, you can compare the effects of market volatilities on Towpath Technology and Franklin Strategic 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 Towpath Technology with a short position of Franklin Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Towpath Technology and Franklin Strategic.
Diversification Opportunities for Towpath Technology and Franklin Strategic
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Towpath and Franklin is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Towpath Technology and Franklin Strategic Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Strategic Series and Towpath Technology 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 Towpath Technology are associated (or correlated) with Franklin Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Strategic Series has no effect on the direction of Towpath Technology i.e., Towpath Technology and Franklin Strategic go up and down completely randomly.
Pair Corralation between Towpath Technology and Franklin Strategic
Assuming the 90 days horizon Towpath Technology is expected to generate 2.16 times more return on investment than Franklin Strategic. However, Towpath Technology is 2.16 times more volatile than Franklin Strategic Series. It trades about 0.07 of its potential returns per unit of risk. Franklin Strategic Series is currently generating about 0.03 per unit of risk. If you would invest 1,428 in Towpath Technology on August 29, 2024 and sell it today you would earn a total of 21.00 from holding Towpath Technology or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Towpath Technology vs. Franklin Strategic Series
Performance |
| Timeline |
| Towpath Technology |
| Franklin Strategic Series |
Towpath Technology and Franklin Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Towpath Technology and Franklin Strategic
The main advantage of trading using opposite Towpath Technology and Franklin Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Towpath Technology position performs unexpectedly, Franklin Strategic 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 Strategic will offset losses from the drop in Franklin Strategic's long position.| Towpath Technology vs. Calvert Global Energy | Towpath Technology vs. Alpsalerian Energy Infrastructure | Towpath Technology vs. Franklin Natural Resources | Towpath Technology vs. Gamco Natural Resources |
| Franklin Strategic vs. Janus Global Technology | Franklin Strategic vs. Towpath Technology | Franklin Strategic vs. Global Technology Portfolio | Franklin Strategic vs. Invesco Technology Fund |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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