Correlation Between Calvert Global and Franklin Natural
Can any of the company-specific risk be diversified away by investing in both Calvert Global and Franklin Natural 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 Calvert Global and Franklin Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert Global Energy and Franklin Natural Resources, you can compare the effects of market volatilities on Calvert Global and Franklin Natural 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 Calvert Global with a short position of Franklin Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Global and Franklin Natural.
Diversification Opportunities for Calvert Global and Franklin Natural
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calvert and Franklin is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Global Energy and Franklin Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Natural Res and Calvert Global 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 Calvert Global Energy are associated (or correlated) with Franklin Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Natural Res has no effect on the direction of Calvert Global i.e., Calvert Global and Franklin Natural go up and down completely randomly.
Pair Corralation between Calvert Global and Franklin Natural
Assuming the 90 days horizon Calvert Global is expected to generate 4.67 times less return on investment than Franklin Natural. In addition to that, Calvert Global is 1.39 times more volatile than Franklin Natural Resources. It trades about 0.07 of its total potential returns per unit of risk. Franklin Natural Resources is currently generating about 0.47 per unit of volatility. If you would invest 2,928 in Franklin Natural Resources on March 25, 2025 and sell it today you would earn a total of 152.00 from holding Franklin Natural Resources or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert Global Energy vs. Franklin Natural Resources
Performance |
| Timeline |
| Calvert Global Energy |
| Franklin Natural Res |
Calvert Global and Franklin Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert Global and Franklin Natural
The main advantage of trading using opposite Calvert Global and Franklin Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Global position performs unexpectedly, Franklin Natural 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 Natural will offset losses from the drop in Franklin Natural's long position.| Calvert Global vs. Siit Large Cap | Calvert Global vs. Washington Mutual Investors | Calvert Global vs. Transamerica Asset Allocation | Calvert Global vs. Nuveen Large Cap |
| Franklin Natural vs. Flakqx | Franklin Natural vs. Ab Select Equity | Franklin Natural vs. Wmcanx | Franklin Natural vs. Wabmsx |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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