Correlation Between Franklin Equity and Aqr Diversified
Can any of the company-specific risk be diversified away by investing in both Franklin Equity and Aqr Diversified 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 Equity and Aqr Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Equity Income and Aqr Diversified Arbitrage, you can compare the effects of market volatilities on Franklin Equity and Aqr Diversified 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 Equity with a short position of Aqr Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Equity and Aqr Diversified.
Diversification Opportunities for Franklin Equity and Aqr Diversified
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Aqr is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Equity Income and Aqr Diversified Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Diversified Arbitrage and Franklin Equity 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 Equity Income are associated (or correlated) with Aqr Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Diversified Arbitrage has no effect on the direction of Franklin Equity i.e., Franklin Equity and Aqr Diversified go up and down completely randomly.
Pair Corralation between Franklin Equity and Aqr Diversified
Assuming the 90 days horizon Franklin Equity Income is expected to generate 6.51 times more return on investment than Aqr Diversified. However, Franklin Equity is 6.51 times more volatile than Aqr Diversified Arbitrage. It trades about 0.3 of its potential returns per unit of risk. Aqr Diversified Arbitrage is currently generating about 0.3 per unit of risk. If you would invest 3,148 in Franklin Equity Income on June 2, 2025 and sell it today you would earn a total of 328.00 from holding Franklin Equity Income or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Equity Income vs. Aqr Diversified Arbitrage
Performance |
| Timeline |
| Franklin Equity Income |
| Aqr Diversified Arbitrage |
Franklin Equity and Aqr Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Equity and Aqr Diversified
The main advantage of trading using opposite Franklin Equity and Aqr Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Equity position performs unexpectedly, Aqr Diversified 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 Aqr Diversified will offset losses from the drop in Aqr Diversified's long position.| Franklin Equity vs. Morningstar Defensive Bond | Franklin Equity vs. T Rowe Price | Franklin Equity vs. Artisan High Income | Franklin Equity vs. Siit Emerging Markets |
| Aqr Diversified vs. Leuthold Global Fund | Aqr Diversified vs. Rbb Fund | Aqr Diversified vs. Tactical Multi Purpose Fund | Aqr Diversified vs. Transamerica Funds |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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