Correlation Between Franklin Adjustable and Quantitative
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Quantitative 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 Quantitative 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 Quantitative Longshort Equity, you can compare the effects of market volatilities on Franklin Adjustable and Quantitative 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 Quantitative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Quantitative.
Diversification Opportunities for Franklin Adjustable and Quantitative
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Quantitative is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Quantitative Longshort Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantitative Longshort 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 Quantitative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantitative Longshort has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Quantitative go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Quantitative
Assuming the 90 days horizon Franklin Adjustable Government is not expected to generate positive returns. However, Franklin Adjustable Government is 16.24 times less risky than Quantitative. It waists most of its returns potential to compensate for thr risk taken. Quantitative is generating about -0.06 per unit of risk. If you would invest 753.00 in Franklin Adjustable Government on October 7, 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 Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Adjustable Government vs. Quantitative Longshort Equity
Performance |
Timeline |
Franklin Adjustable |
Quantitative Longshort |
Franklin Adjustable and Quantitative Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Adjustable and Quantitative
The main advantage of trading using opposite Franklin Adjustable and Quantitative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Quantitative 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 Quantitative will offset losses from the drop in Quantitative's long position.Franklin Adjustable vs. Doubleline Emerging Markets | Franklin Adjustable vs. Mid Cap 15x Strategy | Franklin Adjustable vs. Origin Emerging Markets | Franklin Adjustable vs. Angel Oak Multi Strategy |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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