Correlation Between Fa 529 and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Fa 529 and Franklin Growth 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 Fa 529 and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fa 529 Aggressive and Franklin Growth Opportunities, you can compare the effects of market volatilities on Fa 529 and Franklin Growth 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 Fa 529 with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fa 529 and Franklin Growth.
Diversification Opportunities for Fa 529 and Franklin Growth
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FFCGX and Franklin is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fa 529 Aggressive and Franklin Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth Oppo and Fa 529 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 Fa 529 Aggressive are associated (or correlated) with Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth Oppo has no effect on the direction of Fa 529 i.e., Fa 529 and Franklin Growth go up and down completely randomly.
Pair Corralation between Fa 529 and Franklin Growth
Assuming the 90 days horizon Fa 529 Aggressive is expected to generate 0.61 times more return on investment than Franklin Growth. However, Fa 529 Aggressive is 1.63 times less risky than Franklin Growth. It trades about 0.09 of its potential returns per unit of risk. Franklin Growth Opportunities is currently generating about 0.05 per unit of risk. If you would invest 2,904 in Fa 529 Aggressive on December 5, 2024 and sell it today you would earn a total of 1,065 from holding Fa 529 Aggressive or generate 36.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fa 529 Aggressive vs. Franklin Growth Opportunities
Performance |
Timeline |
Fa 529 Aggressive |
Franklin Growth Oppo |
Fa 529 and Franklin Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fa 529 and Franklin Growth
The main advantage of trading using opposite Fa 529 and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fa 529 position performs unexpectedly, Franklin Growth 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 Growth will offset losses from the drop in Franklin Growth's long position.Fa 529 vs. Tiaa Cref Real Estate | Fa 529 vs. Columbia Real Estate | Fa 529 vs. Amg Managers Centersquare | Fa 529 vs. Rreef Property Trust |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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