Correlation Between Saat Market and Franklin Convertible
Can any of the company-specific risk be diversified away by investing in both Saat Market and Franklin Convertible 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 Saat Market and Franklin Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Market Growth and Franklin Vertible Securities, you can compare the effects of market volatilities on Saat Market and Franklin Convertible 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 Saat Market with a short position of Franklin Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Market and Franklin Convertible.
Diversification Opportunities for Saat Market and Franklin Convertible
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Saat and Franklin is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Saat Market Growth and Franklin Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Convertible and Saat Market 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 Saat Market Growth are associated (or correlated) with Franklin Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Convertible has no effect on the direction of Saat Market i.e., Saat Market and Franklin Convertible go up and down completely randomly.
Pair Corralation between Saat Market and Franklin Convertible
Assuming the 90 days horizon Saat Market is expected to generate 1.14 times less return on investment than Franklin Convertible. But when comparing it to its historical volatility, Saat Market Growth is 1.09 times less risky than Franklin Convertible. It trades about 0.05 of its potential returns per unit of risk. Franklin Vertible Securities is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,944 in Franklin Vertible Securities on October 11, 2024 and sell it today you would earn a total of 297.00 from holding Franklin Vertible Securities or generate 15.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Saat Market Growth vs. Franklin Vertible Securities
Performance |
Timeline |
Saat Market Growth |
Franklin Convertible |
Saat Market and Franklin Convertible Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Saat Market and Franklin Convertible
The main advantage of trading using opposite Saat Market and Franklin Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Market position performs unexpectedly, Franklin Convertible 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 Convertible will offset losses from the drop in Franklin Convertible's long position.Saat Market vs. Simt Multi Asset Accumulation | Saat Market vs. Simt Real Return | Saat Market vs. Simt Small Cap | Saat Market vs. Siit Screened World |
Franklin Convertible vs. Fidelity New Markets | Franklin Convertible vs. Saat Market Growth | Franklin Convertible vs. Franklin Emerging Market | Franklin Convertible vs. Investec Emerging Markets |
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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