Correlation Between Intel and Franklin Liberty

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

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

Diversification Opportunities for Intel and Franklin Liberty

-0.51

Correlation Coefficient

Intel  Franklin Liberty

Excellent diversification

The 3 months correlation between Intel and Franklin is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Franklin Liberty International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty Int and Intel 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 Intel are associated (or correlated) with Franklin Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Liberty Int has no effect on the direction of Intel i.e., Intel and Franklin Liberty go up and down completely randomly.

Pair Corralation between Intel and Franklin Liberty

Given the investment horizon of 90 days Intel is expected to generate 11.67 times more return on investment than Franklin Liberty. However, Intel is 11.67 times more volatile than Franklin Liberty International. It trades about 0.02 of its potential returns per unit of risk. Franklin Liberty International is currently generating about 0.03 per unit of risk. If you would invest  2,077  in Intel on September 18, 2024 and sell it today you would earn a total of  6.00  from holding Intel or generate 0.29% return on investment over 90 days.

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

Intel  vs.  Franklin Liberty International

Intel

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Intel is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Franklin Liberty Int

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Liberty International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Franklin Liberty is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intel and Franklin Liberty

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

The idea behind Intel and Franklin Liberty International 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.