Correlation Between Matson Money and Franklin High
Can any of the company-specific risk be diversified away by investing in both Matson Money and Franklin High 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 Matson Money and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matson Money Equity and Franklin High Yield, you can compare the effects of market volatilities on Matson Money and Franklin High 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 Matson Money with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matson Money and Franklin High.
Diversification Opportunities for Matson Money and Franklin High
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Matson and Franklin is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Equity and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield and Matson Money 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 Matson Money Equity are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Yield has no effect on the direction of Matson Money i.e., Matson Money and Franklin High go up and down completely randomly.
Pair Corralation between Matson Money and Franklin High
Assuming the 90 days horizon Matson Money Equity is expected to under-perform the Franklin High. In addition to that, Matson Money is 3.56 times more volatile than Franklin High Yield. It trades about -0.18 of its total potential returns per unit of risk. Franklin High Yield is currently generating about 0.21 per unit of volatility. If you would invest 900.00 in Franklin High Yield on December 2, 2024 and sell it today you would earn a total of 9.00 from holding Franklin High Yield or generate 1.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Matson Money Equity vs. Franklin High Yield
Performance |
Timeline |
Matson Money Equity |
Franklin High Yield |
Matson Money and Franklin High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Matson Money and Franklin High
The main advantage of trading using opposite Matson Money and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matson Money position performs unexpectedly, Franklin High 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 Franklin High will offset losses from the drop in Franklin High's long position.Matson Money vs. Vy Clarion Real | Matson Money vs. Cohen Steers Real | Matson Money vs. Neuberger Berman Real | Matson Money vs. Voya Real Estate |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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