Correlation Between Wasatch Frontier and Franklin Floating
Can any of the company-specific risk be diversified away by investing in both Wasatch Frontier and Franklin Floating 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 Wasatch Frontier and Franklin Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wasatch Frontier Emerging and Franklin Floating Rate, you can compare the effects of market volatilities on Wasatch Frontier and Franklin Floating 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 Wasatch Frontier with a short position of Franklin Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wasatch Frontier and Franklin Floating.
Diversification Opportunities for Wasatch Frontier and Franklin Floating
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wasatch and Franklin is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Wasatch Frontier Emerging and Franklin Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Floating Rate and Wasatch Frontier 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 Wasatch Frontier Emerging are associated (or correlated) with Franklin Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Floating Rate has no effect on the direction of Wasatch Frontier i.e., Wasatch Frontier and Franklin Floating go up and down completely randomly.
Pair Corralation between Wasatch Frontier and Franklin Floating
Assuming the 90 days horizon Wasatch Frontier Emerging is expected to generate 10.96 times more return on investment than Franklin Floating. However, Wasatch Frontier is 10.96 times more volatile than Franklin Floating Rate. It trades about 0.14 of its potential returns per unit of risk. Franklin Floating Rate is currently generating about -0.18 per unit of risk. If you would invest 359.00 in Wasatch Frontier Emerging on November 4, 2024 and sell it today you would earn a total of 8.00 from holding Wasatch Frontier Emerging or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wasatch Frontier Emerging vs. Franklin Floating Rate
Performance |
| Timeline |
| Wasatch Frontier Emerging |
| Franklin Floating Rate |
Wasatch Frontier and Franklin Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wasatch Frontier and Franklin Floating
The main advantage of trading using opposite Wasatch Frontier and Franklin Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wasatch Frontier position performs unexpectedly, Franklin Floating 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 Floating will offset losses from the drop in Franklin Floating's long position.| Wasatch Frontier vs. Fvkvwx | Wasatch Frontier vs. Fznopx | Wasatch Frontier vs. Small Pany Growth | Wasatch Frontier vs. Wabmsx |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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