Correlation Between Franklin Natural and Calvert Global
Can any of the company-specific risk be diversified away by investing in both Franklin Natural and Calvert Global 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 Natural and Calvert Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Natural Resources and Calvert Global Energy, you can compare the effects of market volatilities on Franklin Natural and Calvert Global 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 Natural with a short position of Calvert Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Natural and Calvert Global.
Diversification Opportunities for Franklin Natural and Calvert Global
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Calvert is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Natural Resources and Calvert Global Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Global Energy and Franklin Natural 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 Natural Resources are associated (or correlated) with Calvert Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Global Energy has no effect on the direction of Franklin Natural i.e., Franklin Natural and Calvert Global go up and down completely randomly.
Pair Corralation between Franklin Natural and Calvert Global
Assuming the 90 days horizon Franklin Natural is expected to generate 1.65 times less return on investment than Calvert Global. But when comparing it to its historical volatility, Franklin Natural Resources is 1.15 times less risky than Calvert Global. It trades about 0.21 of its potential returns per unit of risk. Calvert Global Energy is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,077 in Calvert Global Energy on March 27, 2025 and sell it today you would earn a total of 117.00 from holding Calvert Global Energy or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.56% |
| Values | Daily Returns |
Franklin Natural Resources vs. Calvert Global Energy
Performance |
| Timeline |
| Franklin Natural Res |
| Calvert Global Energy |
Franklin Natural and Calvert Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Natural and Calvert Global
The main advantage of trading using opposite Franklin Natural and Calvert Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Natural position performs unexpectedly, Calvert Global 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 Calvert Global will offset losses from the drop in Calvert Global's long position.| Franklin Natural vs. Franklin Mutual Beacon | Franklin Natural vs. Templeton Developing Markets | Franklin Natural vs. Franklin Mutual Global | Franklin Natural vs. Franklin Mutual Global |
| Calvert Global vs. Gabelli Global Financial | Calvert Global vs. Money Market Obligations | Calvert Global vs. Edward Jones Money | Calvert Global vs. Aig Government Money |
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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