Correlation Between Western Asset and Franklin High
Can any of the company-specific risk be diversified away by investing in both Western Asset and Franklin High 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 High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Total and Franklin High Yield, you can compare the effects of market volatilities on Western Asset and Franklin High 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 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Franklin High.
Diversification Opportunities for Western Asset and Franklin High
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Franklin is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Total and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield 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 Total are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Yield has no effect on the direction of Western Asset i.e., Western Asset and Franklin High go up and down completely randomly.
Pair Corralation between Western Asset and Franklin High
Assuming the 90 days horizon Western Asset is expected to generate 1.58 times less return on investment than Franklin High. But when comparing it to its historical volatility, Western Asset Total is 1.09 times less risky than Franklin High. It trades about 0.12 of its potential returns per unit of risk. Franklin High Yield is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 785.00 in Franklin High Yield on August 25, 2024 and sell it today you would earn a total of 124.00 from holding Franklin High Yield or generate 15.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Total vs. Franklin High Yield
Performance |
| Timeline |
| Western Asset Total |
| Franklin High Yield |
Western Asset and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Franklin High
The main advantage of trading using opposite Western Asset and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Franklin High 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 High will offset losses from the drop in Franklin High's long position.| Western Asset vs. Franklin High Yield | Western Asset vs. Ab Impact Municipal | Western Asset vs. Dws Government Money | Western Asset vs. T Rowe Price |
| Franklin High vs. Pnc Emerging Markets | Franklin High vs. Ashmore Emerging Markets | Franklin High vs. Pace International Emerging | Franklin High vs. Franklin Emerging Market |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stocks Directory Find actively traded stocks across global markets |