Correlation Between Franklin Resources and Guggenheim Strategic
Can any of the company-specific risk be diversified away by investing in both Franklin Resources and Guggenheim 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 Guggenheim 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 Guggenheim Strategic Opportunities, you can compare the effects of market volatilities on Franklin Resources and Guggenheim 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 Guggenheim Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Resources and Guggenheim Strategic.
Diversification Opportunities for Franklin Resources and Guggenheim Strategic
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Guggenheim is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Resources and Guggenheim Strategic Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim 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 Guggenheim Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Strategic has no effect on the direction of Franklin Resources i.e., Franklin Resources and Guggenheim Strategic go up and down completely randomly.
Pair Corralation between Franklin Resources and Guggenheim Strategic
Considering the 90-day investment horizon Franklin Resources is expected to generate 3.07 times more return on investment than Guggenheim Strategic. However, Franklin Resources is 3.07 times more volatile than Guggenheim Strategic Opportunities. It trades about 0.17 of its potential returns per unit of risk. Guggenheim Strategic Opportunities is currently generating about 0.14 per unit of risk. If you would invest 1,915 in Franklin Resources on September 11, 2024 and sell it today you would earn a total of 315.00 from holding Franklin Resources or generate 16.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Resources vs. Guggenheim Strategic Opportuni
Performance |
Timeline |
Franklin Resources |
Guggenheim Strategic |
Franklin Resources and Guggenheim Strategic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Resources and Guggenheim Strategic
The main advantage of trading using opposite Franklin Resources and Guggenheim Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Resources position performs unexpectedly, Guggenheim 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 Guggenheim Strategic will offset losses from the drop in Guggenheim Strategic's long position.Franklin Resources vs. BlackRock | Franklin Resources vs. Main Street Capital | Franklin Resources vs. Blackstone Group | Franklin Resources vs. Ares Capital |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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