Correlation Between Franklin Growth and Westwood High
Can any of the company-specific risk be diversified away by investing in both Franklin Growth and Westwood 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 Franklin Growth and Westwood High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Growth Opportunities and Westwood High Income, you can compare the effects of market volatilities on Franklin Growth and Westwood 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 Franklin Growth with a short position of Westwood High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Westwood High.
Diversification Opportunities for Franklin Growth and Westwood High
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Westwood is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Opportunities and Westwood High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwood High Income and Franklin Growth 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 Growth Opportunities are associated (or correlated) with Westwood High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwood High Income has no effect on the direction of Franklin Growth i.e., Franklin Growth and Westwood High go up and down completely randomly.
Pair Corralation between Franklin Growth and Westwood High
Assuming the 90 days horizon Franklin Growth Opportunities is expected to under-perform the Westwood High. In addition to that, Franklin Growth is 4.73 times more volatile than Westwood High Income. It trades about -0.16 of its total potential returns per unit of risk. Westwood High Income is currently generating about -0.02 per unit of volatility. If you would invest 1,016 in Westwood High Income on December 3, 2024 and sell it today you would lose (3.00) from holding Westwood High Income or give up 0.3% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 77.05% |
Values | Daily Returns |
Franklin Growth Opportunities vs. Westwood High Income
Performance |
Timeline |
Franklin Growth Oppo |
Westwood High Income |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Franklin Growth and Westwood High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Growth and Westwood High
The main advantage of trading using opposite Franklin Growth and Westwood High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth position performs unexpectedly, Westwood 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 Westwood High will offset losses from the drop in Westwood High's long position.Franklin Growth vs. Inverse Government Long | Franklin Growth vs. Franklin Adjustable Government | Franklin Growth vs. Federated Government Income | Franklin Growth vs. John Hancock Government |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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