Correlation Between Franklin Vertible and Live Oak

Can any of the company-specific risk be diversified away by investing in both Franklin Vertible and Live Oak 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 Vertible and Live Oak 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 Live Oak Health, you can compare the effects of market volatilities on Franklin Vertible and Live Oak 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 Vertible with a short position of Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Vertible and Live Oak.

Diversification Opportunities for Franklin Vertible and Live Oak

-0.46

Correlation Coefficient

Franklin Vertible  Live Oak

Very good diversification

The 3 months correlation between Franklin and Live is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and Live Oak Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Oak Health and Franklin Vertible 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 Live Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Oak Health has no effect on the direction of Franklin Vertible i.e., Franklin Vertible and Live Oak go up and down completely randomly.

Pair Corralation between Franklin Vertible and Live Oak

Assuming the 90 days horizon Franklin Vertible Securities is expected to generate 0.59 times more return on investment than Live Oak. However, Franklin Vertible Securities is 1.7 times less risky than Live Oak. It trades about 0.16 of its potential returns per unit of risk. Live Oak Health is currently generating about -0.32 per unit of risk. If you would invest  2,329  in Franklin Vertible Securities on September 14, 2024 and sell it today you would earn a total of  38.00  from holding Franklin Vertible Securities or generate 1.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Franklin Vertible Securities  vs.  Live Oak Health

Franklin Vertible

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Vertible Securities are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Franklin Vertible may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Live Oak Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Live Oak Health has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Franklin Vertible and Live Oak

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

The idea behind Franklin Vertible Securities and Live Oak Health 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.