Correlation Between Franklin Moderate and Redwood Real
Can any of the company-specific risk be diversified away by investing in both Franklin Moderate and Redwood Real 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 Moderate and Redwood Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Moderate Allocation and Redwood Real Estate, you can compare the effects of market volatilities on Franklin Moderate and Redwood Real 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 Moderate with a short position of Redwood Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Moderate and Redwood Real.
Diversification Opportunities for Franklin Moderate and Redwood Real
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Redwood is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Moderate Allocation and Redwood Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redwood Real Estate and Franklin Moderate 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 Moderate Allocation are associated (or correlated) with Redwood Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redwood Real Estate has no effect on the direction of Franklin Moderate i.e., Franklin Moderate and Redwood Real go up and down completely randomly.
Pair Corralation between Franklin Moderate and Redwood Real
Assuming the 90 days horizon Franklin Moderate Allocation is expected to generate 13.19 times more return on investment than Redwood Real. However, Franklin Moderate is 13.19 times more volatile than Redwood Real Estate. It trades about 0.21 of its potential returns per unit of risk. Redwood Real Estate is currently generating about 0.94 per unit of risk. If you would invest 1,578 in Franklin Moderate Allocation on June 11, 2025 and sell it today you would earn a total of 82.00 from holding Franklin Moderate Allocation or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Franklin Moderate Allocation vs. Redwood Real Estate
Performance |
| Timeline |
| Franklin Moderate |
| Redwood Real Estate |
Franklin Moderate and Redwood Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Moderate and Redwood Real
The main advantage of trading using opposite Franklin Moderate and Redwood Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Moderate position performs unexpectedly, Redwood Real 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 Redwood Real will offset losses from the drop in Redwood Real's long position.| Franklin Moderate vs. Flkypx | Franklin Moderate vs. T Rowe Price | Franklin Moderate vs. Wmcanx | Franklin Moderate vs. Fabwx |
| Redwood Real vs. Ab Government Exchange | Redwood Real vs. Franklin Government Money | Redwood Real vs. Mesirow Financial Small | Redwood Real vs. Icon Financial Fund |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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