Correlation Between Franklin High and Tiaa-cref Large-cap
Can any of the company-specific risk be diversified away by investing in both Franklin High and Tiaa-cref Large-cap 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 Tiaa-cref Large-cap 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 Tiaa Cref Large Cap Growth, you can compare the effects of market volatilities on Franklin High and Tiaa-cref Large-cap 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 Tiaa-cref Large-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and Tiaa-cref Large-cap.
Diversification Opportunities for Franklin High and Tiaa-cref Large-cap
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Tiaa-cref is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and Tiaa Cref Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa-cref Large-cap 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 Tiaa-cref Large-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa-cref Large-cap has no effect on the direction of Franklin High i.e., Franklin High and Tiaa-cref Large-cap go up and down completely randomly.
Pair Corralation between Franklin High and Tiaa-cref Large-cap
Assuming the 90 days horizon Franklin High is expected to generate 29.5 times less return on investment than Tiaa-cref Large-cap. But when comparing it to its historical volatility, Franklin High Yield is 4.12 times less risky than Tiaa-cref Large-cap. It trades about 0.01 of its potential returns per unit of risk. Tiaa Cref Large Cap Growth is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,881 in Tiaa Cref Large Cap Growth on October 25, 2024 and sell it today you would earn a total of 107.00 from holding Tiaa Cref Large Cap Growth or generate 3.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin High Yield vs. Tiaa Cref Large Cap Growth
Performance |
Timeline |
Franklin High Yield |
Tiaa-cref Large-cap |
Franklin High and Tiaa-cref Large-cap Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin High and Tiaa-cref Large-cap
The main advantage of trading using opposite Franklin High and Tiaa-cref Large-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, Tiaa-cref Large-cap 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 Tiaa-cref Large-cap will offset losses from the drop in Tiaa-cref Large-cap's long position.Franklin High vs. Inflation Protected Bond Fund | Franklin High vs. Lord Abbett Inflation | Franklin High vs. Simt Multi Asset Inflation | Franklin High vs. Tiaa Cref Inflation Link |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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