Correlation Between Global Real and Franklin Adjustable
Can any of the company-specific risk be diversified away by investing in both Global Real 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 Global Real and Franklin Adjustable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Real Estate and Franklin Adjustable Government, you can compare the effects of market volatilities on Global Real 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 Global Real with a short position of Franklin Adjustable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Real and Franklin Adjustable.
Diversification Opportunities for Global Real and Franklin Adjustable
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Franklin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Global Real Estate and Franklin Adjustable Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Adjustable and Global Real 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 Global Real Estate 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 Global Real i.e., Global Real and Franklin Adjustable go up and down completely randomly.
Pair Corralation between Global Real and Franklin Adjustable
Assuming the 90 days horizon Global Real Estate is expected to generate 7.31 times more return on investment than Franklin Adjustable. However, Global Real is 7.31 times more volatile than Franklin Adjustable Government. It trades about 0.09 of its potential returns per unit of risk. Franklin Adjustable Government is currently generating about 0.05 per unit of risk. If you would invest 2,800 in Global Real Estate on April 30, 2025 and sell it today you would earn a total of 106.00 from holding Global Real Estate or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Global Real Estate vs. Franklin Adjustable Government
Performance |
| Timeline |
| Global Real Estate |
| Franklin Adjustable |
Global Real and Franklin Adjustable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Real and Franklin Adjustable
The main advantage of trading using opposite Global Real and Franklin Adjustable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Real 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.| Global Real vs. Vanguard Information Technology | Global Real vs. Columbia Global Technology | Global Real vs. Pgim Jennison Technology | Global Real vs. Janus Global Technology |
| Franklin Adjustable vs. Franklin Mutual Beacon | Franklin Adjustable vs. Templeton Developing Markets | Franklin Adjustable vs. Franklin Mutual Global | Franklin Adjustable vs. Franklin Mutual Global |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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