Correlation Between Franklin Low and Wisdomtree Siegel

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

By analyzing existing cross correlation between Franklin Low Duration and Wisdomtree Siegel Global, you can compare the effects of market volatilities on Franklin Low and Wisdomtree Siegel 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 Low with a short position of Wisdomtree Siegel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Low and Wisdomtree Siegel.

Diversification Opportunities for Franklin Low and Wisdomtree Siegel

-0.1

Correlation Coefficient

Franklin Low  Wisdomtree Siegel

Good diversification

The 3 months correlation between Franklin and Wisdomtree is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Low Duration and Wisdomtree Siegel Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisdomtree Siegel Global and Franklin Low 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 Low Duration are associated (or correlated) with Wisdomtree Siegel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisdomtree Siegel Global has no effect on the direction of Franklin Low i.e., Franklin Low and Wisdomtree Siegel go up and down completely randomly.

Pair Corralation between Franklin Low and Wisdomtree Siegel

Assuming the 90 days horizon Franklin Low Duration is expected to generate 0.19 times more return on investment than Wisdomtree Siegel. However, Franklin Low Duration is 5.32 times less risky than Wisdomtree Siegel. It trades about 0.14 of its potential returns per unit of risk. Wisdomtree Siegel Global is currently generating about -0.12 per unit of risk. If you would invest  881.00  in Franklin Low Duration on October 4, 2024 and sell it today you would earn a total of  18.00  from holding Franklin Low Duration or generate 2.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	40.8%
Values	Daily Returns

Franklin Low Duration  vs.  Wisdomtree Siegel Global

Franklin Low Duration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Low Duration has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Franklin Low is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Wisdomtree Siegel Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wisdomtree Siegel Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Wisdomtree Siegel 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 Low and Wisdomtree Siegel

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

The idea behind Franklin Low Duration and Wisdomtree Siegel Global 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.