Correlation Between Franklin Adjustable and Catalystwarrington

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

By analyzing existing cross correlation between Franklin Adjustable Government and Catalystwarrington Strategic Program, you can compare the effects of market volatilities on Franklin Adjustable and Catalystwarrington 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 Adjustable with a short position of Catalystwarrington. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Catalystwarrington.

Diversification Opportunities for Franklin Adjustable and Catalystwarrington

0.14

Correlation Coefficient

Franklin Adjustable  Catalystwarrington

Average diversification

The 3 months correlation between Franklin and Catalystwarrington is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Catalystwarrington Strategic P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystwarrington and Franklin Adjustable 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 Adjustable Government are associated (or correlated) with Catalystwarrington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystwarrington has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Catalystwarrington go up and down completely randomly.

Pair Corralation between Franklin Adjustable and Catalystwarrington

Assuming the 90 days horizon Franklin Adjustable Government is not expected to generate positive returns. However, Franklin Adjustable Government is 4.18 times less risky than Catalystwarrington. It waists most of its returns potential to compensate for thr risk taken. Catalystwarrington is generating about -0.11 per unit of risk. If you would invest  753.00  in Franklin Adjustable Government on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Franklin Adjustable Government or generate 0.0% return on investment over 90 days.

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

Franklin Adjustable Government  vs.  Catalystwarrington Strategic P

Franklin Adjustable

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Adjustable Government has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Franklin Adjustable is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Catalystwarrington

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catalystwarrington Strategic Program has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Catalystwarrington is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Franklin Adjustable and Catalystwarrington

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

The idea behind Franklin Adjustable Government and Catalystwarrington Strategic Program 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.