Correlation Between Franklin High and American Funds
Can any of the company-specific risk be diversified away by investing in both Franklin High and American 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 American 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 American Funds 2065, you can compare the effects of market volatilities on Franklin High and American 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin High and American Funds.
Diversification Opportunities for Franklin High and American Funds
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and American is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Franklin High Yield and American Funds 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2065 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2065 has no effect on the direction of Franklin High i.e., Franklin High and American Funds go up and down completely randomly.
Pair Corralation between Franklin High and American Funds
Assuming the 90 days horizon Franklin High Yield is expected to generate 0.31 times more return on investment than American Funds. However, Franklin High Yield is 3.26 times less risky than American Funds. It trades about -0.01 of its potential returns per unit of risk. American Funds 2065 is currently generating about -0.04 per unit of risk. If you would invest 887.00 in Franklin High Yield on December 30, 2024 and sell it today you would lose (1.00) from holding Franklin High Yield or give up 0.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin High Yield vs. American Funds 2065
Performance |
Timeline |
Franklin High Yield |
American Funds 2065 |
Franklin High and American Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin High and American Funds
The main advantage of trading using opposite Franklin High and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin High position performs unexpectedly, American 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 American Funds will offset losses from the drop in American Funds' long position.Franklin High vs. Oklahoma College Savings | Franklin High vs. Rbc Emerging Markets | Franklin High vs. Transamerica Emerging Markets | Franklin High vs. T Rowe Price |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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