Correlation Between Franklin Federal and Rmb Fund
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Rmb Fund 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 Federal and Rmb Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Federal Limited Term and Rmb Fund C, you can compare the effects of market volatilities on Franklin Federal and Rmb Fund 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 Federal with a short position of Rmb Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Rmb Fund.
Diversification Opportunities for Franklin Federal and Rmb Fund
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Rmb is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Limited Term and Rmb Fund C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmb Fund C and Franklin Federal 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 Federal Limited Term are associated (or correlated) with Rmb Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmb Fund C has no effect on the direction of Franklin Federal i.e., Franklin Federal and Rmb Fund go up and down completely randomly.
Pair Corralation between Franklin Federal and Rmb Fund
Assuming the 90 days horizon Franklin Federal is expected to generate 3.24 times less return on investment than Rmb Fund. But when comparing it to its historical volatility, Franklin Federal Limited Term is 7.61 times less risky than Rmb Fund. It trades about 0.39 of its potential returns per unit of risk. Rmb Fund C is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,495 in Rmb Fund C on June 11, 2025 and sell it today you would earn a total of 162.00 from holding Rmb Fund C or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Franklin Federal Limited Term vs. Rmb Fund C
Performance |
| Timeline |
| Franklin Federal Lim |
| Rmb Fund C |
Franklin Federal and Rmb Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Rmb Fund
The main advantage of trading using opposite Franklin Federal and Rmb Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Rmb Fund 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 Rmb Fund will offset losses from the drop in Rmb Fund's long position.| Franklin Federal vs. Siit Small Cap | Franklin Federal vs. Tax Managed Mid Small | Franklin Federal vs. Scout Small Cap | Franklin Federal vs. Artisan Small Cap |
| Rmb Fund vs. Rmb Small Cap | Rmb Fund vs. Rmb Fund A | Rmb Fund vs. Rmb Fund I | Rmb Fund vs. Rmb Mendon Financial |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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