Correlation Between Franklin High and Siit High
Can any of the company-specific risk be diversified away by investing in both Franklin High and Siit High 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 Siit High 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 Siit High Yield, you can compare the effects of market volatilities on Franklin High and Siit High 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 Siit High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Siit High.
Diversification Opportunities for Franklin High and Siit High
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Siit is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Income and Siit High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit High Yield 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 Siit High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit High Yield has no effect on the direction of Franklin High i.e., Franklin High and Siit High go up and down completely randomly.
Pair Corralation between Franklin High and Siit High
Assuming the 90 days horizon Franklin High is expected to generate 2.6 times less return on investment than Siit High. In addition to that, Franklin High is 1.22 times more volatile than Siit High Yield. It trades about 0.03 of its total potential returns per unit of risk. Siit High Yield is currently generating about 0.1 per unit of volatility. If you would invest 696.00 in Siit High Yield on December 29, 2024 and sell it today you would earn a total of 11.00 from holding Siit High Yield or generate 1.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin High Income vs. Siit High Yield
Performance |
Timeline |
Franklin High Income |
Siit High Yield |
Franklin High and Siit High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin High and Siit High
The main advantage of trading using opposite Franklin High and Siit High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Siit High 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 Siit High will offset losses from the drop in Siit High's long position.Franklin High vs. Legg Mason Partners | Franklin High vs. Pace High Yield | Franklin High vs. Western Asset High | Franklin High vs. Tiaa Cref High Yield 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 Valuation module to check real value of public entities based on technical and fundamental data.
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