Correlation Between Siit Small and Franklin Federal
Can any of the company-specific risk be diversified away by investing in both Siit Small and Franklin Federal 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 Siit Small and Franklin Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Small Cap and Franklin Federal Limited Term, you can compare the effects of market volatilities on Siit Small and Franklin Federal 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 Siit Small with a short position of Franklin Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Small and Franklin Federal.
Diversification Opportunities for Siit Small and Franklin Federal
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siit and Franklin is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Siit Small Cap and Franklin Federal Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Federal Lim and Siit Small 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 Siit Small Cap are associated (or correlated) with Franklin Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Federal Lim has no effect on the direction of Siit Small i.e., Siit Small and Franklin Federal go up and down completely randomly.
Pair Corralation between Siit Small and Franklin Federal
Assuming the 90 days horizon Siit Small Cap is expected to generate 12.78 times more return on investment than Franklin Federal. However, Siit Small is 12.78 times more volatile than Franklin Federal Limited Term. It trades about 0.16 of its potential returns per unit of risk. Franklin Federal Limited Term is currently generating about 0.4 per unit of risk. If you would invest 1,070 in Siit Small Cap on June 12, 2025 and sell it today you would earn a total of 117.00 from holding Siit Small Cap or generate 10.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Siit Small Cap vs. Franklin Federal Limited Term
Performance |
| Timeline |
| Siit Small Cap |
| Franklin Federal Lim |
Siit Small and Franklin Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Small and Franklin Federal
The main advantage of trading using opposite Siit Small and Franklin Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Small position performs unexpectedly, Franklin Federal 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 Federal will offset losses from the drop in Franklin Federal's long position.| Siit Small vs. T Rowe Price | Siit Small vs. Fidelity Capital Income | Siit Small vs. Neuberger Berman Income | Siit Small vs. Msift High Yield |
| Franklin Federal vs. Tfa Alphagen Growth | Franklin Federal vs. Rbc Emerging Markets | Franklin Federal vs. Semiconductor Ultrasector Profund | Franklin Federal vs. Rbb Fund |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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