Correlation Between Wpg Partners and Franklin Federal
Can any of the company-specific risk be diversified away by investing in both Wpg Partners and Franklin Federal 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 Wpg Partners and Franklin Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wpg Partners Select and Franklin Federal Limited Term, you can compare the effects of market volatilities on Wpg Partners and Franklin Federal 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 Wpg Partners with a short position of Franklin Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wpg Partners and Franklin Federal.
Diversification Opportunities for Wpg Partners and Franklin Federal
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wpg and Franklin is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Wpg Partners Select and Franklin Federal Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Federal Lim and Wpg Partners 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 Wpg Partners Select are associated (or correlated) with Franklin Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Federal Lim has no effect on the direction of Wpg Partners i.e., Wpg Partners and Franklin Federal go up and down completely randomly.
Pair Corralation between Wpg Partners and Franklin Federal
Assuming the 90 days horizon Wpg Partners is expected to generate 1.89 times less return on investment than Franklin Federal. In addition to that, Wpg Partners is 4.28 times more volatile than Franklin Federal Limited Term. It trades about 0.03 of its total potential returns per unit of risk. Franklin Federal Limited Term is currently generating about 0.22 per unit of volatility. If you would invest 1,003 in Franklin Federal Limited Term on September 1, 2024 and sell it today you would earn a total of 30.00 from holding Franklin Federal Limited Term or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Wpg Partners Select vs. Franklin Federal Limited Term
Performance |
| Timeline |
| Wpg Partners Select |
| Franklin Federal Lim |
Wpg Partners and Franklin Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wpg Partners and Franklin Federal
The main advantage of trading using opposite Wpg Partners and Franklin Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wpg Partners position performs unexpectedly, Franklin Federal 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 Federal will offset losses from the drop in Franklin Federal's long position.| Wpg Partners vs. Barings Emerging Markets | Wpg Partners vs. Shelton Emerging Markets | Wpg Partners vs. Goldman Sachs Emerging | Wpg Partners vs. Pnc Emerging Markets |
| Franklin Federal vs. Small Midcap Dividend Income | Franklin Federal vs. Tax Managed Mid Small | Franklin Federal vs. Touchstone Small Cap | Franklin Federal vs. Jpmorgan Small Cap |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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