Correlation Between Growth Strategy and Franklin Adjustable
Can any of the company-specific risk be diversified away by investing in both Growth Strategy and Franklin Adjustable 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 Growth Strategy and Franklin Adjustable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Strategy Fund and Franklin Adjustable Government, you can compare the effects of market volatilities on Growth Strategy and Franklin Adjustable 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 Growth Strategy with a short position of Franklin Adjustable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Strategy and Franklin Adjustable.
Diversification Opportunities for Growth Strategy and Franklin Adjustable
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Growth and Franklin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Growth Strategy Fund and Franklin Adjustable Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Adjustable and Growth Strategy 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 Growth Strategy Fund are associated (or correlated) with Franklin Adjustable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Adjustable has no effect on the direction of Growth Strategy i.e., Growth Strategy and Franklin Adjustable go up and down completely randomly.
Pair Corralation between Growth Strategy and Franklin Adjustable
Assuming the 90 days horizon Growth Strategy Fund is expected to generate 6.73 times more return on investment than Franklin Adjustable. However, Growth Strategy is 6.73 times more volatile than Franklin Adjustable Government. It trades about 0.08 of its potential returns per unit of risk. Franklin Adjustable Government is currently generating about 0.18 per unit of risk. If you would invest 1,026 in Growth Strategy Fund on June 4, 2025 and sell it today you would earn a total of 346.00 from holding Growth Strategy Fund or generate 33.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Strategy Fund vs. Franklin Adjustable Government
Performance |
| Timeline |
| Growth Strategy |
| Franklin Adjustable |
Growth Strategy and Franklin Adjustable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Strategy and Franklin Adjustable
The main advantage of trading using opposite Growth Strategy and Franklin Adjustable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Strategy position performs unexpectedly, Franklin Adjustable 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 Franklin Adjustable will offset losses from the drop in Franklin Adjustable's long position.| Growth Strategy vs. American Funds The | Growth Strategy vs. American Funds The | Growth Strategy vs. Income Fund Of | Growth Strategy vs. Income Fund Of |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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