Correlation Between Franklin Vertible and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Franklin Vertible and Federated Strategic 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 Vertible and Federated Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Vertible Securities and Federated Strategic Income, you can compare the effects of market volatilities on Franklin Vertible and Federated Strategic 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 Vertible with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Vertible and Federated Strategic.
Diversification Opportunities for Franklin Vertible and Federated Strategic
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Federated is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic and Franklin Vertible 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 Vertible Securities are associated (or correlated) with Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic has no effect on the direction of Franklin Vertible i.e., Franklin Vertible and Federated Strategic go up and down completely randomly.
Pair Corralation between Franklin Vertible and Federated Strategic
Assuming the 90 days horizon Franklin Vertible Securities is expected to generate 2.71 times more return on investment than Federated Strategic. However, Franklin Vertible is 2.71 times more volatile than Federated Strategic Income. It trades about 0.28 of its potential returns per unit of risk. Federated Strategic Income is currently generating about 0.24 per unit of risk. If you would invest 2,230 in Franklin Vertible Securities on April 26, 2025 and sell it today you would earn a total of 190.00 from holding Franklin Vertible Securities or generate 8.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Vertible Securities vs. Federated Strategic Income
Performance |
| Timeline |
| Franklin Vertible |
| Federated Strategic |
Franklin Vertible and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Vertible and Federated Strategic
The main advantage of trading using opposite Franklin Vertible and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Vertible position performs unexpectedly, Federated Strategic 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 Federated Strategic will offset losses from the drop in Federated Strategic's long position.The idea behind Franklin Vertible Securities and Federated Strategic Income 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.| Federated Strategic vs. Ips Strategic Capital | Federated Strategic vs. Qs Large Cap | Federated Strategic vs. Flakqx | Federated Strategic vs. Rational Dividend Capture |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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