Correlation Between Stellar and Franklin Adjustable
Can any of the company-specific risk be diversified away by investing in both Stellar and Franklin Adjustable 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 Stellar and Franklin Adjustable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and Franklin Adjustable Government, you can compare the effects of market volatilities on Stellar and Franklin Adjustable 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 Stellar with a short position of Franklin Adjustable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and Franklin Adjustable.
Diversification Opportunities for Stellar and Franklin Adjustable
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stellar and Franklin is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Franklin Adjustable Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Adjustable and Stellar 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 Stellar are associated (or correlated) with Franklin Adjustable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Adjustable has no effect on the direction of Stellar i.e., Stellar and Franklin Adjustable go up and down completely randomly.
Pair Corralation between Stellar and Franklin Adjustable
Assuming the 90 days trading horizon Stellar is expected to generate 59.3 times more return on investment than Franklin Adjustable. However, Stellar is 59.3 times more volatile than Franklin Adjustable Government. It trades about 0.03 of its potential returns per unit of risk. Franklin Adjustable Government is currently generating about 0.17 per unit of risk. If you would invest 44.00 in Stellar on October 26, 2024 and sell it today you would lose (1.00) from holding Stellar or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.7% |
| Values | Daily Returns |
Stellar vs. Franklin Adjustable Government
Performance |
| Timeline |
| Stellar |
| Franklin Adjustable |
Stellar and Franklin Adjustable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar and Franklin Adjustable
The main advantage of trading using opposite Stellar and Franklin Adjustable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, Franklin Adjustable 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 Adjustable will offset losses from the drop in Franklin Adjustable's long position.The idea behind Stellar and Franklin Adjustable Government pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Franklin Adjustable vs. Lord Abbett Short | Franklin Adjustable vs. Voya High Yield | Franklin Adjustable vs. Neuberger Berman Income | Franklin Adjustable vs. Strategic Advisers Income |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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