Correlation Between Aggressive Balanced and Franklin California
Can any of the company-specific risk be diversified away by investing in both Aggressive Balanced and Franklin California 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 Aggressive Balanced and Franklin California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aggressive Balanced Allocation and Franklin California High, you can compare the effects of market volatilities on Aggressive Balanced and Franklin California 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 Aggressive Balanced with a short position of Franklin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aggressive Balanced and Franklin California.
Diversification Opportunities for Aggressive Balanced and Franklin California
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aggressive and Franklin is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Balanced Allocation and Franklin California High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin California High and Aggressive Balanced 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 Aggressive Balanced Allocation are associated (or correlated) with Franklin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin California High has no effect on the direction of Aggressive Balanced i.e., Aggressive Balanced and Franklin California go up and down completely randomly.
Pair Corralation between Aggressive Balanced and Franklin California
Assuming the 90 days horizon Aggressive Balanced is expected to generate 1.36 times less return on investment than Franklin California. In addition to that, Aggressive Balanced is 2.78 times more volatile than Franklin California High. It trades about 0.11 of its total potential returns per unit of risk. Franklin California High is currently generating about 0.43 per unit of volatility. If you would invest 924.00 in Franklin California High on July 26, 2025 and sell it today you would earn a total of 53.00 from holding Franklin California High or generate 5.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Aggressive Balanced Allocation vs. Franklin California High
Performance |
| Timeline |
| Aggressive Balanced |
| Franklin California High |
Aggressive Balanced and Franklin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aggressive Balanced and Franklin California
The main advantage of trading using opposite Aggressive Balanced and Franklin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aggressive Balanced position performs unexpectedly, Franklin California 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 California will offset losses from the drop in Franklin California's long position.| Aggressive Balanced vs. Omni Small Cap Value | Aggressive Balanced vs. Queens Road Small | Aggressive Balanced vs. Mutual Of America | Aggressive Balanced vs. Palm Valley Capital |
| Franklin California vs. Saat Tax Managed Aggressive | Franklin California vs. Aggressive Balanced Allocation | Franklin California vs. Intal High Relative | Franklin California vs. Ab High Income |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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