Correlation Between Franklin Federal and Inverse Nasdaq-100
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Inverse Nasdaq-100 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 Inverse Nasdaq-100 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 Inverse Nasdaq 100 Strategy, you can compare the effects of market volatilities on Franklin Federal and Inverse Nasdaq-100 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 Inverse Nasdaq-100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Inverse Nasdaq-100.
Diversification Opportunities for Franklin Federal and Inverse Nasdaq-100
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Inverse is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Limited Term and Inverse Nasdaq 100 Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse Nasdaq 100 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 Inverse Nasdaq-100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse Nasdaq 100 has no effect on the direction of Franklin Federal i.e., Franklin Federal and Inverse Nasdaq-100 go up and down completely randomly.
Pair Corralation between Franklin Federal and Inverse Nasdaq-100
Assuming the 90 days horizon Franklin Federal Limited Term is expected to generate 0.09 times more return on investment than Inverse Nasdaq-100. However, Franklin Federal Limited Term is 11.14 times less risky than Inverse Nasdaq-100. It trades about 0.32 of its potential returns per unit of risk. Inverse Nasdaq 100 Strategy is currently generating about -0.13 per unit of risk. If you would invest 1,022 in Franklin Federal Limited Term on June 5, 2025 and sell it today you would earn a total of 14.00 from holding Franklin Federal Limited Term or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Federal Limited Term vs. Inverse Nasdaq 100 Strategy
Performance |
| Timeline |
| Franklin Federal Lim |
| Inverse Nasdaq 100 |
Franklin Federal and Inverse Nasdaq-100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Inverse Nasdaq-100
The main advantage of trading using opposite Franklin Federal and Inverse Nasdaq-100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Inverse Nasdaq-100 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 Inverse Nasdaq-100 will offset losses from the drop in Inverse Nasdaq-100's long position.| Franklin Federal vs. Aqr Large Cap | Franklin Federal vs. Legg Mason Bw | Franklin Federal vs. Transamerica Large Cap | Franklin Federal vs. Dana Large Cap |
| Inverse Nasdaq-100 vs. Goldman Sachs Short | Inverse Nasdaq-100 vs. Lord Abbett Short | Inverse Nasdaq-100 vs. Easterly Snow Longshort | Inverse Nasdaq-100 vs. Barings Active Short |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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