Correlation Between Franklin Natural and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Franklin Natural 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 Natural 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 Natural Resources and Federated Strategic Value, you can compare the effects of market volatilities on Franklin Natural 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 Natural with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Natural and Federated Strategic.
Diversification Opportunities for Franklin Natural and Federated Strategic
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FRANKLIN and Federated is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Natural Resources and Federated Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic Value 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 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 Value has no effect on the direction of Franklin Natural i.e., Franklin Natural and Federated Strategic go up and down completely randomly.
Pair Corralation between Franklin Natural and Federated Strategic
Assuming the 90 days horizon Franklin Natural Resources is expected to generate 1.55 times more return on investment than Federated Strategic. However, Franklin Natural is 1.55 times more volatile than Federated Strategic Value. It trades about 0.08 of its potential returns per unit of risk. Federated Strategic Value is currently generating about 0.04 per unit of risk. If you would invest 2,846 in Franklin Natural Resources on June 8, 2025 and sell it today you would earn a total of 445.00 from holding Franklin Natural Resources or generate 15.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Franklin Natural Resources vs. Federated Strategic Value
Performance |
| Timeline |
| Franklin Natural Res |
| Federated Strategic Value |
Franklin Natural and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Natural and Federated Strategic
The main advantage of trading using opposite Franklin Natural and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Natural 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.| Franklin Natural vs. Prudential Qma Large Cap | Franklin Natural vs. Aqr Large Cap | Franklin Natural vs. Cb Large Cap | Franklin Natural vs. Dreyfus Large Cap |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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