Correlation Between Panagram Bbb and Franklin Liberty

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

By analyzing existing cross correlation between Panagram Bbb B Clo and Franklin Liberty Senior, you can compare the effects of market volatilities on Panagram Bbb and Franklin Liberty 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 Panagram Bbb with a short position of Franklin Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panagram Bbb and Franklin Liberty.

Diversification Opportunities for Panagram Bbb and Franklin Liberty

0.87

Correlation Coefficient

Panagram Bbb  Franklin Liberty

Very poor diversification

The 3 months correlation between Panagram and Franklin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Panagram Bbb B Clo and Franklin Liberty Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty Senior and Panagram Bbb 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 Panagram Bbb B Clo are associated (or correlated) with Franklin Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Liberty Senior has no effect on the direction of Panagram Bbb i.e., Panagram Bbb and Franklin Liberty go up and down completely randomly.

Pair Corralation between Panagram Bbb and Franklin Liberty

Given the investment horizon of 90 days Panagram Bbb B Clo is expected to under-perform the Franklin Liberty. But the etf apears to be less risky and, when comparing its historical volatility, Panagram Bbb B Clo is 1.06 times less risky than Franklin Liberty. The etf trades about -0.05 of its potential returns per unit of risk. The Franklin Liberty Senior is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,401  in Franklin Liberty Senior on December 27, 2024 and sell it today you would earn a total of  2.00  from holding Franklin Liberty Senior or generate 0.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Panagram Bbb B Clo  vs.  Franklin Liberty Senior

Panagram Bbb B

Risk-Adjusted Performance

Very Weak

Over the last 90 days Panagram Bbb B Clo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Panagram Bbb is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Franklin Liberty Senior

Risk-Adjusted Performance

Very Weak

Over the last 90 days Franklin Liberty Senior has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Franklin Liberty is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Panagram Bbb and Franklin Liberty

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

The idea behind Panagram Bbb B Clo and Franklin Liberty Senior 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.