Correlation Between Franklin Convertible and Hundredfold Select

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

By analyzing existing cross correlation between Franklin Vertible Securities and Hundredfold Select Alternative, you can compare the effects of market volatilities on Franklin Convertible and Hundredfold Select 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 Convertible with a short position of Hundredfold Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Convertible and Hundredfold Select.

Diversification Opportunities for Franklin Convertible and Hundredfold Select

0.48

Correlation Coefficient

Franklin Convertible  Hundredfold Select

Very weak diversification

The 3 months correlation between Franklin and Hundredfold is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and Hundredfold Select Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hundredfold Select and Franklin Convertible 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 Vertible Securities are associated (or correlated) with Hundredfold Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hundredfold Select has no effect on the direction of Franklin Convertible i.e., Franklin Convertible and Hundredfold Select go up and down completely randomly.

Pair Corralation between Franklin Convertible and Hundredfold Select

Assuming the 90 days horizon Franklin Vertible Securities is expected to under-perform the Hundredfold Select. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Vertible Securities is 1.15 times less risky than Hundredfold Select. The mutual fund trades about -0.37 of its potential returns per unit of risk. The Hundredfold Select Alternative is currently generating about -0.27 of returns per unit of risk over similar time horizon. If you would invest  2,331  in Hundredfold Select Alternative on October 10, 2024 and sell it today you would lose (118.00) from holding Hundredfold Select Alternative or give up 5.06% of portfolio value over 90 days.

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

Franklin Vertible Securities  vs.  Hundredfold Select Alternative

Franklin Convertible

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Vertible Securities are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, Franklin Convertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hundredfold Select

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hundredfold Select Alternative has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hundredfold Select 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 Convertible and Hundredfold Select

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

The idea behind Franklin Vertible Securities and Hundredfold Select Alternative 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.