Correlation Between Franklin Emerging and Putnam Massachusetts
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Putnam Massachusetts 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 Emerging and Putnam Massachusetts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Emerging Market and Putnam Massachusetts Tax, you can compare the effects of market volatilities on Franklin Emerging and Putnam Massachusetts 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 Emerging with a short position of Putnam Massachusetts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Putnam Massachusetts.
Diversification Opportunities for Franklin Emerging and Putnam Massachusetts
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Putnam is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Putnam Massachusetts Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Massachusetts Tax and Franklin Emerging 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 Emerging Market are associated (or correlated) with Putnam Massachusetts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Massachusetts Tax has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Putnam Massachusetts go up and down completely randomly.
Pair Corralation between Franklin Emerging and Putnam Massachusetts
Assuming the 90 days horizon Franklin Emerging Market is expected to generate 1.01 times more return on investment than Putnam Massachusetts. However, Franklin Emerging is 1.01 times more volatile than Putnam Massachusetts Tax. It trades about 0.26 of its potential returns per unit of risk. Putnam Massachusetts Tax is currently generating about 0.0 per unit of risk. If you would invest 1,152 in Franklin Emerging Market on October 24, 2024 and sell it today you would earn a total of 12.00 from holding Franklin Emerging Market or generate 1.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 94.74% |
Values | Daily Returns |
Franklin Emerging Market vs. Putnam Massachusetts Tax
Performance |
Timeline |
Franklin Emerging Market |
Putnam Massachusetts Tax |
Franklin Emerging and Putnam Massachusetts Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Emerging and Putnam Massachusetts
The main advantage of trading using opposite Franklin Emerging and Putnam Massachusetts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Putnam Massachusetts 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 Putnam Massachusetts will offset losses from the drop in Putnam Massachusetts' long position.Franklin Emerging vs. Alger Health Sciences | Franklin Emerging vs. Highland Longshort Healthcare | Franklin Emerging vs. Alphacentric Lifesci Healthcare | Franklin Emerging vs. Allianzgi Health Sciences |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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