Correlation Between Franklin Biotechnology and Rational Dividend
Can any of the company-specific risk be diversified away by investing in both Franklin Biotechnology and Rational Dividend 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 Biotechnology and Rational Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Biotechnology Discovery and Rational Dividend Capture, you can compare the effects of market volatilities on Franklin Biotechnology and Rational Dividend 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 Biotechnology with a short position of Rational Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Biotechnology and Rational Dividend.
Diversification Opportunities for Franklin Biotechnology and Rational Dividend
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Rational is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Biotechnology Discove and Rational Dividend Capture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rational Dividend Capture and Franklin Biotechnology 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 Biotechnology Discovery are associated (or correlated) with Rational Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rational Dividend Capture has no effect on the direction of Franklin Biotechnology i.e., Franklin Biotechnology and Rational Dividend go up and down completely randomly.
Pair Corralation between Franklin Biotechnology and Rational Dividend
Assuming the 90 days horizon Franklin Biotechnology Discovery is expected to generate 2.62 times more return on investment than Rational Dividend. However, Franklin Biotechnology is 2.62 times more volatile than Rational Dividend Capture. It trades about 0.22 of its potential returns per unit of risk. Rational Dividend Capture is currently generating about 0.15 per unit of risk. If you would invest 12,652 in Franklin Biotechnology Discovery on June 9, 2025 and sell it today you would earn a total of 2,454 from holding Franklin Biotechnology Discovery or generate 19.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Biotechnology Discove vs. Rational Dividend Capture
Performance |
| Timeline |
| Franklin Biotechnology |
| Rational Dividend Capture |
Franklin Biotechnology and Rational Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Biotechnology and Rational Dividend
The main advantage of trading using opposite Franklin Biotechnology and Rational Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Biotechnology position performs unexpectedly, Rational Dividend 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 Rational Dividend will offset losses from the drop in Rational Dividend's long position.The idea behind Franklin Biotechnology Discovery and Rational Dividend Capture 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.
| Rational Dividend vs. Rationalrgn Hedged Equity | Rational Dividend vs. Rationalrgn Hedged Equity | Rational Dividend vs. Rationalrgn Hedged Equity | Rational Dividend vs. Rational Dynamic Momentum |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| AI Portfolio Prophet Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |