Correlation Between Western Asset and Franklin Oregon
Can any of the company-specific risk be diversified away by investing in both Western Asset and Franklin Oregon 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 Western Asset and Franklin Oregon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset E and Franklin Oregon Tax Free, you can compare the effects of market volatilities on Western Asset and Franklin Oregon 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 Western Asset with a short position of Franklin Oregon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Franklin Oregon.
Diversification Opportunities for Western Asset and Franklin Oregon
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Franklin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset E and Franklin Oregon Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Oregon Tax and Western Asset 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 Western Asset E are associated (or correlated) with Franklin Oregon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Oregon Tax has no effect on the direction of Western Asset i.e., Western Asset and Franklin Oregon go up and down completely randomly.
Pair Corralation between Western Asset and Franklin Oregon
Assuming the 90 days horizon Western Asset is expected to generate 1.24 times less return on investment than Franklin Oregon. In addition to that, Western Asset is 1.29 times more volatile than Franklin Oregon Tax Free. It trades about 0.12 of its total potential returns per unit of risk. Franklin Oregon Tax Free is currently generating about 0.19 per unit of volatility. If you would invest 1,065 in Franklin Oregon Tax Free on September 1, 2024 and sell it today you would earn a total of 13.00 from holding Franklin Oregon Tax Free or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset E vs. Franklin Oregon Tax Free
Performance |
| Timeline |
| Western Asset E |
| Franklin Oregon Tax |
Western Asset and Franklin Oregon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Franklin Oregon
The main advantage of trading using opposite Western Asset and Franklin Oregon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Franklin Oregon 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 Oregon will offset losses from the drop in Franklin Oregon's long position.| Western Asset vs. Franklin High Income | Western Asset vs. T Rowe Price | Western Asset vs. Ab Global Risk | Western Asset vs. Federated Institutional High |
| Franklin Oregon vs. Shelton Emerging Markets | Franklin Oregon vs. Ep Emerging Markets | Franklin Oregon vs. Transamerica Emerging Markets | Franklin Oregon vs. Siit Emerging Markets |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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