Correlation Between Franklin and Wisdomtree Siegel

Can any of the company-specific risk be diversified away by investing in both Franklin 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 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 Government Money and Wisdomtree Siegel Global, you can compare the effects of market volatilities on Franklin 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 with a short position of Wisdomtree Siegel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Wisdomtree Siegel.

Diversification Opportunities for Franklin and Wisdomtree Siegel

0.0

Correlation Coefficient

Franklin  Wisdomtree Siegel

Pay attention - limited upside

The 3 months correlation between Franklin and Wisdomtree is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money 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 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 Government Money 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 i.e., Franklin and Wisdomtree Siegel go up and down completely randomly.

Pair Corralation between Franklin and Wisdomtree Siegel

Assuming the 90 days horizon Franklin Government Money is expected to under-perform the Wisdomtree Siegel. In addition to that, Franklin is 5.21 times more volatile than Wisdomtree Siegel Global. It trades about -0.04 of its total potential returns per unit of risk. Wisdomtree Siegel Global is currently generating about 0.09 per unit of volatility. If you would invest  1,004  in Wisdomtree Siegel Global on October 25, 2024 and sell it today you would earn a total of  173.00  from holding Wisdomtree Siegel Global or generate 17.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	56.3%
Values	Daily Returns

Franklin Government Money  vs.  Wisdomtree Siegel Global

Franklin Government Money

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Government Money has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Franklin 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

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wisdomtree Siegel Global are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. 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 and Wisdomtree Siegel

The main advantage of trading using opposite Franklin and Wisdomtree Siegel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin 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 Government Money 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.