Correlation Between Franklin Convertible and Boston Partners
Can any of the company-specific risk be diversified away by investing in both Franklin Convertible and Boston Partners 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 Convertible and Boston Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Vertible Securities and Boston Partners Longshort, you can compare the effects of market volatilities on Franklin Convertible and Boston Partners 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 Convertible with a short position of Boston Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Convertible and Boston Partners.
Diversification Opportunities for Franklin Convertible and Boston Partners
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Boston is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and Boston Partners Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Partners Longshort and Franklin Convertible 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 Vertible Securities are associated (or correlated) with Boston Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Partners Longshort has no effect on the direction of Franklin Convertible i.e., Franklin Convertible and Boston Partners go up and down completely randomly.
Pair Corralation between Franklin Convertible and Boston Partners
Assuming the 90 days horizon Franklin Vertible Securities is expected to under-perform the Boston Partners. In addition to that, Franklin Convertible is 1.18 times more volatile than Boston Partners Longshort. It trades about -0.07 of its total potential returns per unit of risk. Boston Partners Longshort is currently generating about 0.04 per unit of volatility. If you would invest 1,348 in Boston Partners Longshort on December 29, 2024 and sell it today you would earn a total of 16.00 from holding Boston Partners Longshort or generate 1.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Vertible Securities vs. Boston Partners Longshort
Performance |
Timeline |
Franklin Convertible |
Boston Partners Longshort |
Franklin Convertible and Boston Partners Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Convertible and Boston Partners
The main advantage of trading using opposite Franklin Convertible and Boston Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Convertible position performs unexpectedly, Boston Partners 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 Boston Partners will offset losses from the drop in Boston Partners' long position.Franklin Convertible vs. Fidelity Advisor Health | Franklin Convertible vs. Schwab Health Care | Franklin Convertible vs. Blackrock Health Sciences | Franklin Convertible vs. Fidelity Advisor Health |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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