Correlation Between Franklin Small and Rmb Fund
Can any of the company-specific risk be diversified away by investing in both Franklin Small and Rmb Fund 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 Small and Rmb Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Small Cap and Rmb Fund A, you can compare the effects of market volatilities on Franklin Small and Rmb Fund 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 Small with a short position of Rmb Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Small and Rmb Fund.
Diversification Opportunities for Franklin Small and Rmb Fund
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Rmb is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Small Cap and Rmb Fund A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmb Fund A and Franklin Small 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 Small Cap are associated (or correlated) with Rmb Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmb Fund A has no effect on the direction of Franklin Small i.e., Franklin Small and Rmb Fund go up and down completely randomly.
Pair Corralation between Franklin Small and Rmb Fund
Assuming the 90 days horizon Franklin Small Cap is expected to generate 1.57 times more return on investment than Rmb Fund. However, Franklin Small is 1.57 times more volatile than Rmb Fund A. It trades about 0.1 of its potential returns per unit of risk. Rmb Fund A is currently generating about 0.09 per unit of risk. If you would invest 1,573 in Franklin Small Cap on September 5, 2025 and sell it today you would earn a total of 112.00 from holding Franklin Small Cap or generate 7.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Franklin Small Cap vs. Rmb Fund A
Performance |
| Timeline |
| Franklin Small Cap |
| Rmb Fund A |
Franklin Small and Rmb Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Small and Rmb Fund
The main advantage of trading using opposite Franklin Small and Rmb Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Small position performs unexpectedly, Rmb Fund 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 Rmb Fund will offset losses from the drop in Rmb Fund's long position.| Franklin Small vs. Manning Napier Diversified | Franklin Small vs. Allianzgi Diversified Income | Franklin Small vs. Elfun Diversified Fund | Franklin Small vs. Eaton Vance Diversified |
| Rmb Fund vs. Gmo High Yield | Rmb Fund vs. Enhanced Fixed Income | Rmb Fund vs. Federated Municipal High | Rmb Fund vs. Flexible Bond Portfolio |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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