Correlation Between Clearbridge Energy and Franklin Federal
Can any of the company-specific risk be diversified away by investing in both Clearbridge Energy 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 Clearbridge Energy and Franklin Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Energy Mlp and Franklin Federal Tax Free, you can compare the effects of market volatilities on Clearbridge Energy 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 Clearbridge Energy with a short position of Franklin Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Energy and Franklin Federal.
Diversification Opportunities for Clearbridge Energy and Franklin Federal
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Clearbridge and Franklin is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Energy Mlp and Franklin Federal Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Federal Tax and Clearbridge Energy 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 Clearbridge Energy Mlp 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 Tax has no effect on the direction of Clearbridge Energy i.e., Clearbridge Energy and Franklin Federal go up and down completely randomly.
Pair Corralation between Clearbridge Energy and Franklin Federal
Assuming the 90 days horizon Clearbridge Energy Mlp is expected to generate 4.43 times more return on investment than Franklin Federal. However, Clearbridge Energy is 4.43 times more volatile than Franklin Federal Tax Free. It trades about 0.21 of its potential returns per unit of risk. Franklin Federal Tax Free is currently generating about -0.01 per unit of risk. If you would invest 4,823 in Clearbridge Energy Mlp on October 26, 2024 and sell it today you would earn a total of 833.00 from holding Clearbridge Energy Mlp or generate 17.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Energy Mlp vs. Franklin Federal Tax Free
Performance |
| Timeline |
| Clearbridge Energy Mlp |
| Franklin Federal Tax |
Clearbridge Energy and Franklin Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Energy and Franklin Federal
The main advantage of trading using opposite Clearbridge Energy and Franklin Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Energy 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.| Clearbridge Energy vs. Ab Global Bond | Clearbridge Energy vs. Morningstar Global Income | Clearbridge Energy vs. Rbc Global Opportunities | Clearbridge Energy vs. Gmo Global Equity |
| Franklin Federal vs. Clearbridge Energy Mlp | Franklin Federal vs. Environment And Alternative | Franklin Federal vs. Hennessy Bp Energy | Franklin Federal vs. Invesco Energy 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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