Correlation Between Franklin Vertible and Mainstay Vertible

Can any of the company-specific risk be diversified away by investing in both Franklin Vertible and Mainstay Vertible 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 Vertible and Mainstay Vertible into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Franklin Vertible Securities and Mainstay Vertible Fund, you can compare the effects of market volatilities on Franklin Vertible and Mainstay Vertible 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 Vertible with a short position of Mainstay Vertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Vertible and Mainstay Vertible.

Diversification Opportunities for Franklin Vertible and Mainstay Vertible

0.92

Correlation Coefficient

Franklin Vertible  Mainstay Vertible

Almost no diversification

The 3 months correlation between Franklin and Mainstay is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and Mainstay Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Vertible and Franklin Vertible 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 Vertible Securities are associated (or correlated) with Mainstay Vertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Vertible has no effect on the direction of Franklin Vertible i.e., Franklin Vertible and Mainstay Vertible go up and down completely randomly.

Pair Corralation between Franklin Vertible and Mainstay Vertible

Assuming the 90 days horizon Franklin Vertible Securities is expected to generate 1.18 times more return on investment than Mainstay Vertible. However, Franklin Vertible is 1.18 times more volatile than Mainstay Vertible Fund. It trades about 0.37 of its potential returns per unit of risk. Mainstay Vertible Fund is currently generating about 0.18 per unit of risk. If you would invest  2,194  in Franklin Vertible Securities on September 12, 2024 and sell it today you would earn a total of  259.00  from holding Franklin Vertible Securities or generate 11.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Franklin Vertible Securities  vs.  Mainstay Vertible Fund

Franklin Vertible

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Vertible Securities are ranked lower than 29 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Franklin Vertible may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mainstay Vertible

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Vertible Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mainstay Vertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Franklin Vertible and Mainstay Vertible

The main advantage of trading using opposite Franklin Vertible and Mainstay Vertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Vertible position performs unexpectedly, Mainstay Vertible 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 Mainstay Vertible will offset losses from the drop in Mainstay Vertible's long position.

The idea behind Franklin Vertible Securities and Mainstay Vertible Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to 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.