Correlation Between Franklin California and Avantis Large
Can any of the company-specific risk be diversified away by investing in both Franklin California and Avantis Large 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 Franklin California and Avantis Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin California High and Avantis Large Cap, you can compare the effects of market volatilities on Franklin California and Avantis Large 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 Franklin California with a short position of Avantis Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin California and Avantis Large.
Diversification Opportunities for Franklin California and Avantis Large
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Avantis is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Franklin California High and Avantis Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis Large Cap and Franklin California 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 Franklin California High are associated (or correlated) with Avantis Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis Large Cap has no effect on the direction of Franklin California i.e., Franklin California and Avantis Large go up and down completely randomly.
Pair Corralation between Franklin California and Avantis Large
Assuming the 90 days horizon Franklin California is expected to generate 1.68 times less return on investment than Avantis Large. But when comparing it to its historical volatility, Franklin California High is 5.1 times less risky than Avantis Large. It trades about 0.31 of its potential returns per unit of risk. Avantis Large Cap is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,526 in Avantis Large Cap on September 5, 2025 and sell it today you would earn a total of 77.00 from holding Avantis Large Cap or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin California High vs. Avantis Large Cap
Performance |
| Timeline |
| Franklin California High |
| Avantis Large Cap |
Franklin California and Avantis Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin California and Avantis Large
The main advantage of trading using opposite Franklin California and Avantis Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin California position performs unexpectedly, Avantis Large 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 Avantis Large will offset losses from the drop in Avantis Large's long position.| Franklin California vs. Franklin Mutual Beacon | Franklin California vs. Templeton Developing Markets | Franklin California vs. Franklin Mutual Global | Franklin California vs. Franklin Mutual Global |
| Avantis Large vs. Calvert Aggressive Allocation | Avantis Large vs. Delaware Minnesota High Yield | Avantis Large vs. Fidelity American High | Avantis Large vs. Franklin California High |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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