Correlation Between Huber Capital and Franklin Federal
Can any of the company-specific risk be diversified away by investing in both Huber Capital and Franklin Federal 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 Huber Capital and Franklin Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huber Capital Diversified and Franklin Federal Limited Term, you can compare the effects of market volatilities on Huber Capital and Franklin Federal 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 Huber Capital with a short position of Franklin Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huber Capital and Franklin Federal.
Diversification Opportunities for Huber Capital and Franklin Federal
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Huber and Franklin is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Huber Capital Diversified and Franklin Federal Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Federal Lim and Huber Capital 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 Huber Capital Diversified are associated (or correlated) with Franklin Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Federal Lim has no effect on the direction of Huber Capital i.e., Huber Capital and Franklin Federal go up and down completely randomly.
Pair Corralation between Huber Capital and Franklin Federal
Assuming the 90 days horizon Huber Capital Diversified is expected to generate 7.86 times more return on investment than Franklin Federal. However, Huber Capital is 7.86 times more volatile than Franklin Federal Limited Term. It trades about 0.07 of its potential returns per unit of risk. Franklin Federal Limited Term is currently generating about 0.13 per unit of risk. If you would invest 1,774 in Huber Capital Diversified on September 24, 2024 and sell it today you would earn a total of 606.00 from holding Huber Capital Diversified or generate 34.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Huber Capital Diversified vs. Franklin Federal Limited Term
Performance |
Timeline |
Huber Capital Diversified |
Franklin Federal Lim |
Huber Capital and Franklin Federal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Huber Capital and Franklin Federal
The main advantage of trading using opposite Huber Capital and Franklin Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huber Capital position performs unexpectedly, Franklin Federal 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 Federal will offset losses from the drop in Franklin Federal's long position.Huber Capital vs. Huber Capital Diversified | Huber Capital vs. Huber Capital Equity | Huber Capital vs. Huber Capital Equity | Huber Capital vs. Huber Capital Mid |
Franklin Federal vs. Huber Capital Diversified | Franklin Federal vs. Davenport Small Cap | Franklin Federal vs. Delaware Limited Term Diversified | Franklin Federal vs. Blackrock Sm Cap |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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