Correlation Between Franklin Moderate and Eventide Exponential
Can any of the company-specific risk be diversified away by investing in both Franklin Moderate and Eventide Exponential 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 Moderate and Eventide Exponential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Moderate Allocation and Eventide Exponential Technologies, you can compare the effects of market volatilities on Franklin Moderate and Eventide Exponential 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 Moderate with a short position of Eventide Exponential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Moderate and Eventide Exponential.
Diversification Opportunities for Franklin Moderate and Eventide Exponential
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Eventide is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Moderate Allocation and Eventide Exponential Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Exponential and Franklin Moderate 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 Moderate Allocation are associated (or correlated) with Eventide Exponential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Exponential has no effect on the direction of Franklin Moderate i.e., Franklin Moderate and Eventide Exponential go up and down completely randomly.
Pair Corralation between Franklin Moderate and Eventide Exponential
Assuming the 90 days horizon Franklin Moderate is expected to generate 12.42 times less return on investment than Eventide Exponential. But when comparing it to its historical volatility, Franklin Moderate Allocation is 2.79 times less risky than Eventide Exponential. It trades about 0.03 of its potential returns per unit of risk. Eventide Exponential Technologies is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,160 in Eventide Exponential Technologies on October 23, 2024 and sell it today you would earn a total of 160.00 from holding Eventide Exponential Technologies or generate 13.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Moderate Allocation vs. Eventide Exponential Technolog
Performance |
Timeline |
Franklin Moderate |
Eventide Exponential |
Franklin Moderate and Eventide Exponential Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Moderate and Eventide Exponential
The main advantage of trading using opposite Franklin Moderate and Eventide Exponential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Moderate position performs unexpectedly, Eventide Exponential 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 Eventide Exponential will offset losses from the drop in Eventide Exponential's long position.Franklin Moderate vs. Glg Intl Small | Franklin Moderate vs. Praxis Small Cap | Franklin Moderate vs. Ab Small Cap | Franklin Moderate vs. Needham Small Cap |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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