Correlation Between Polen Smid and Franklin Real
Can any of the company-specific risk be diversified away by investing in both Polen Smid and Franklin Real 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 Polen Smid and Franklin Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polen Smid and Franklin Real Estate, you can compare the effects of market volatilities on Polen Smid and Franklin Real 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 Polen Smid with a short position of Franklin Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polen Smid and Franklin Real.
Diversification Opportunities for Polen Smid and Franklin Real
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polen and Franklin is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Polen Smid and Franklin Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Real Estate and Polen Smid 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 Polen Smid are associated (or correlated) with Franklin Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Real Estate has no effect on the direction of Polen Smid i.e., Polen Smid and Franklin Real go up and down completely randomly.
Pair Corralation between Polen Smid and Franklin Real
Assuming the 90 days horizon Polen Smid is expected to generate 1.3 times more return on investment than Franklin Real. However, Polen Smid is 1.3 times more volatile than Franklin Real Estate. It trades about 0.16 of its potential returns per unit of risk. Franklin Real Estate is currently generating about -0.08 per unit of risk. If you would invest 777.00 in Polen Smid on September 15, 2024 and sell it today you would earn a total of 88.00 from holding Polen Smid or generate 11.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Polen Smid vs. Franklin Real Estate
Performance |
Timeline |
Polen Smid |
Franklin Real Estate |
Polen Smid and Franklin Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Polen Smid and Franklin Real
The main advantage of trading using opposite Polen Smid and Franklin Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polen Smid position performs unexpectedly, Franklin Real 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 Real will offset losses from the drop in Franklin Real's long position.Polen Smid vs. Franklin Real Estate | Polen Smid vs. Columbia Real Estate | Polen Smid vs. Vy Clarion Real | Polen Smid vs. Goldman Sachs Real |
Franklin Real vs. Franklin Natural Resources | Franklin Real vs. Franklin Small Cap | Franklin Real vs. Templeton Developing Markets | Franklin Real vs. Franklin Balance Sheet |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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