Correlation Between Franklin Adjustable and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Franklin Adjustable and Old Westbury 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 Adjustable and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Adjustable Government and Old Westbury Municipal, you can compare the effects of market volatilities on Franklin Adjustable and Old Westbury 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 Adjustable with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Adjustable and Old Westbury.
Diversification Opportunities for Franklin Adjustable and Old Westbury
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Old is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Adjustable Government and Old Westbury Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Municipal and Franklin Adjustable 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 Adjustable Government are associated (or correlated) with Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Municipal has no effect on the direction of Franklin Adjustable i.e., Franklin Adjustable and Old Westbury go up and down completely randomly.
Pair Corralation between Franklin Adjustable and Old Westbury
Assuming the 90 days horizon Franklin Adjustable Government is expected to generate 0.35 times more return on investment than Old Westbury. However, Franklin Adjustable Government is 2.89 times less risky than Old Westbury. It trades about 0.06 of its potential returns per unit of risk. Old Westbury Municipal is currently generating about 0.0 per unit of risk. If you would invest 752.00 in Franklin Adjustable Government on April 4, 2025 and sell it today you would earn a total of 3.00 from holding Franklin Adjustable Government or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Franklin Adjustable Government vs. Old Westbury Municipal
Performance |
| Timeline |
| Franklin Adjustable |
| Old Westbury Municipal |
Franklin Adjustable and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Adjustable and Old Westbury
The main advantage of trading using opposite Franklin Adjustable and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Adjustable position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Franklin Adjustable vs. Artisan High Income | Franklin Adjustable vs. Gmo Emerging Markets | Franklin Adjustable vs. Sp Midcap Index | Franklin Adjustable vs. Rbc Emerging Markets |
| Old Westbury vs. Vanguard Intermediate Term Tax Exempt | Old Westbury vs. Vanguard Intermediate Term Tax Exempt | Old Westbury vs. Tax Exempt Bond | Old Westbury vs. Tax Exempt Bond |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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