Correlation Between Franklin High and Aggressive Allocation
Can any of the company-specific risk be diversified away by investing in both Franklin High and Aggressive Allocation 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 Aggressive Allocation 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 Aggressive Allocation Fund, you can compare the effects of market volatilities on Franklin High and Aggressive Allocation 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 Aggressive Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Aggressive Allocation.
Diversification Opportunities for Franklin High and Aggressive Allocation
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Aggressive is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Aggressive Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Allocation 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 Aggressive Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Allocation has no effect on the direction of Franklin High i.e., Franklin High and Aggressive Allocation go up and down completely randomly.
Pair Corralation between Franklin High and Aggressive Allocation
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.34 times more return on investment than Aggressive Allocation. However, Franklin High Yield is 2.95 times less risky than Aggressive Allocation. It trades about 0.13 of its potential returns per unit of risk. Aggressive Allocation Fund is currently generating about 0.01 per unit of risk. If you would invest 911.00 in Franklin High Yield on December 5, 2024 and sell it today you would earn a total of 12.00 from holding Franklin High Yield or generate 1.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 97.5% |
Values | Daily Returns |
Franklin High Yield vs. Aggressive Allocation Fund
Performance |
Timeline |
Franklin High Yield |
Aggressive Allocation |
Franklin High and Aggressive Allocation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin High and Aggressive Allocation
The main advantage of trading using opposite Franklin High and Aggressive Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Aggressive Allocation 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 Aggressive Allocation will offset losses from the drop in Aggressive Allocation's long position.Franklin High vs. Rbb Fund Trust | Franklin High vs. Dws Global Macro | Franklin High vs. Dreyfusstandish Global Fixed | Franklin High vs. Mirova Global Green |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |