Correlation Between Franklin High and Aristotle Funds
Can any of the company-specific risk be diversified away by investing in both Franklin High and Aristotle Funds 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 Aristotle Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin High Yield and Aristotle Funds Series, you can compare the effects of market volatilities on Franklin High and Aristotle Funds 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 Aristotle Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Aristotle Funds.
Diversification Opportunities for Franklin High and Aristotle Funds
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Aristotle is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Aristotle Funds Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Funds Series 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 Yield are associated (or correlated) with Aristotle Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Funds Series has no effect on the direction of Franklin High i.e., Franklin High and Aristotle Funds go up and down completely randomly.
Pair Corralation between Franklin High and Aristotle Funds
Assuming the 90 days horizon Franklin High is expected to generate 1.97 times less return on investment than Aristotle Funds. But when comparing it to its historical volatility, Franklin High Yield is 4.29 times less risky than Aristotle Funds. It trades about 0.07 of its potential returns per unit of risk. Aristotle Funds Series is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,437 in Aristotle Funds Series on September 25, 2024 and sell it today you would earn a total of 116.00 from holding Aristotle Funds Series or generate 8.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin High Yield vs. Aristotle Funds Series
Performance |
Timeline |
Franklin High Yield |
Aristotle Funds Series |
Franklin High and Aristotle Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin High and Aristotle Funds
The main advantage of trading using opposite Franklin High and Aristotle Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Aristotle Funds 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 Aristotle Funds will offset losses from the drop in Aristotle Funds' long position.Franklin High vs. Delaware Limited Term Diversified | Franklin High vs. Elfun Diversified Fund | Franklin High vs. Western Asset Diversified | Franklin High vs. Prudential Core Conservative |
Aristotle Funds vs. Franklin High Yield | Aristotle Funds vs. Pace High Yield | Aristotle Funds vs. Western Asset Municipal | Aristotle Funds vs. Doubleline Yield Opportunities |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Positions Ratings 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 | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |