Correlation Between Visa and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Visa and Franklin Growth 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 Visa and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Franklin Growth Fund, you can compare the effects of market volatilities on Visa and Franklin Growth 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 Visa with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Franklin Growth.
Diversification Opportunities for Visa and Franklin Growth
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Franklin is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Franklin Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth and Visa 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 Visa Class A are associated (or correlated) with Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth has no effect on the direction of Visa i.e., Visa and Franklin Growth go up and down completely randomly.
Pair Corralation between Visa and Franklin Growth
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.49 times more return on investment than Franklin Growth. However, Visa is 1.49 times more volatile than Franklin Growth Fund. It trades about 0.34 of its potential returns per unit of risk. Franklin Growth Fund is currently generating about 0.22 per unit of risk. If you would invest 29,018 in Visa Class A on September 2, 2024 and sell it today you would earn a total of 2,490 from holding Visa Class A or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Franklin Growth Fund
Performance |
| Timeline |
| Visa Class A |
| Franklin Growth |
Visa and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Franklin Growth
The main advantage of trading using opposite Visa and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Franklin Growth 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 Growth will offset losses from the drop in Franklin Growth's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Franklin Growth vs. Mfs International Diversification | Franklin Growth vs. John Hancock Bond | Franklin Growth vs. Prudential Total Return | Franklin Growth vs. New World 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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