Correlation Between Franklin High and Tax-managed
Can any of the company-specific risk be diversified away by investing in both Franklin High and Tax-managed 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 High and Tax-managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin High Income and Tax Managed Large Cap, you can compare the effects of market volatilities on Franklin High and Tax-managed 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 High with a short position of Tax-managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Tax-managed.
Diversification Opportunities for Franklin High and Tax-managed
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Tax-managed is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Income and Tax Managed Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tax Managed Large and Franklin High 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 High Income are associated (or correlated) with Tax-managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tax Managed Large has no effect on the direction of Franklin High i.e., Franklin High and Tax-managed go up and down completely randomly.
Pair Corralation between Franklin High and Tax-managed
Assuming the 90 days horizon Franklin High Income is expected to generate 0.31 times more return on investment than Tax-managed. However, Franklin High Income is 3.21 times less risky than Tax-managed. It trades about 0.07 of its potential returns per unit of risk. Tax Managed Large Cap is currently generating about -0.06 per unit of risk. If you would invest 172.00 in Franklin High Income on December 28, 2024 and sell it today you would earn a total of 2.00 from holding Franklin High Income or generate 1.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin High Income vs. Tax Managed Large Cap
Performance |
Timeline |
Franklin High Income |
Tax Managed Large |
Franklin High and Tax-managed Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin High and Tax-managed
The main advantage of trading using opposite Franklin High and Tax-managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Tax-managed 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 Tax-managed will offset losses from the drop in Tax-managed's long position.Franklin High vs. Gamco International Growth | Franklin High vs. Ftfa Franklin Templeton Growth | Franklin High vs. Growth Allocation Fund | Franklin High vs. Auer Growth Fund |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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