Correlation Between Franklin Resources and Renavotio

Can any of the company-specific risk be diversified away by investing in both Franklin Resources and Renavotio 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 Renavotio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Franklin Resources and Renavotio, you can compare the effects of market volatilities on Franklin Resources and Renavotio 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 Renavotio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Resources and Renavotio.

Diversification Opportunities for Franklin Resources and Renavotio

0.0

Correlation Coefficient

Franklin Resources  Renavotio

Pay attention - limited upside

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

Pair Corralation between Franklin Resources and Renavotio

If you would invest  2,014  in Franklin Resources on December 21, 2024 and sell it today you would lose (13.00) from holding Franklin Resources or give up 0.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Franklin Resources  vs.  Renavotio

Franklin Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Franklin Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Franklin Resources is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Renavotio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Renavotio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Renavotio is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Franklin Resources and Renavotio

The main advantage of trading using opposite Franklin Resources and Renavotio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Resources position performs unexpectedly, Renavotio 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 Renavotio will offset losses from the drop in Renavotio's long position.

The idea behind Franklin Resources and Renavotio 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.