Correlation Between Franklin Resources and Cornerstone Strategic

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Can any of the company-specific risk be diversified away by investing in both Franklin Resources and Cornerstone Strategic 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 Franklin Resources and Cornerstone Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Resources and Cornerstone Strategic Value, you can compare the effects of market volatilities on Franklin Resources and Cornerstone Strategic 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 Franklin Resources with a short position of Cornerstone Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Resources and Cornerstone Strategic.

Diversification Opportunities for Franklin Resources and Cornerstone Strategic

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Franklin and Cornerstone is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Resources and Cornerstone Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic and Franklin Resources 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 Franklin Resources are associated (or correlated) with Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Franklin Resources i.e., Franklin Resources and Cornerstone Strategic go up and down completely randomly.

Pair Corralation between Franklin Resources and Cornerstone Strategic

If you would invest  1,884  in Franklin Resources on September 6, 2024 and sell it today you would earn a total of  383.00  from holding Franklin Resources or generate 20.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy1.56%
ValuesDaily Returns

Franklin Resources  vs.  Cornerstone Strategic Value

 Performance 
       Timeline  
Franklin Resources 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Resources are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Franklin Resources displayed solid returns over the last few months and may actually be approaching a breakup point.
Cornerstone Strategic 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cornerstone Strategic Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy essential indicators, Cornerstone Strategic is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Franklin Resources and Cornerstone Strategic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Franklin Resources and Cornerstone Strategic

The main advantage of trading using opposite Franklin Resources and Cornerstone Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Resources position performs unexpectedly, Cornerstone Strategic 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 Cornerstone Strategic will offset losses from the drop in Cornerstone Strategic's long position.
The idea behind Franklin Resources and Cornerstone Strategic Value 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.
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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