Correlation Between Unity Software and Franklin Total

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

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

Diversification Opportunities for Unity Software and Franklin Total

0.23

Correlation Coefficient

Unity Software  Franklin Total

Modest diversification

The 3 months correlation between Unity and FRANKLIN is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Unity Software and Franklin Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Total Return and Unity Software 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 Unity Software are associated (or correlated) with Franklin Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Total Return has no effect on the direction of Unity Software i.e., Unity Software and Franklin Total go up and down completely randomly.

Pair Corralation between Unity Software and Franklin Total

Taking into account the 90-day investment horizon Unity Software is expected to generate 19.34 times more return on investment than Franklin Total. However, Unity Software is 19.34 times more volatile than Franklin Total Return. It trades about 0.01 of its potential returns per unit of risk. Franklin Total Return is currently generating about 0.08 per unit of risk. If you would invest  2,251  in Unity Software on December 28, 2024 and sell it today you would lose (93.00) from holding Unity Software or give up 4.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Unity Software  vs.  Franklin Total Return

Unity Software

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Unity Software are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Unity Software is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Franklin Total Return

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Total Return are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Franklin Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Unity Software and Franklin Total

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

The idea behind Unity Software and Franklin Total Return 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.