Correlation Between Franklin Real and Columbia Disciplined

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

By analyzing existing cross correlation between Franklin Real Estate and Columbia Disciplined Value, you can compare the effects of market volatilities on Franklin Real and Columbia Disciplined 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 Real with a short position of Columbia Disciplined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Columbia Disciplined.

Diversification Opportunities for Franklin Real and Columbia Disciplined

-0.83

Correlation Coefficient

Franklin Real  Columbia Disciplined

Pay attention - limited upside

The 3 months correlation between Franklin and Columbia is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Columbia Disciplined Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Disciplined and Franklin Real 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 Real Estate are associated (or correlated) with Columbia Disciplined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Disciplined has no effect on the direction of Franklin Real i.e., Franklin Real and Columbia Disciplined go up and down completely randomly.

Pair Corralation between Franklin Real and Columbia Disciplined

If you would invest  1,661  in Franklin Real Estate on October 22, 2024 and sell it today you would lose (3.00) from holding Franklin Real Estate or give up 0.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	0.44%
Values	Daily Returns

Franklin Real Estate  vs.  Columbia Disciplined Value

Franklin Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Columbia Disciplined

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbia Disciplined Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Columbia Disciplined 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 Real and Columbia Disciplined

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

The idea behind Franklin Real Estate and Columbia Disciplined Value 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.