Correlation Between Armada Hflr and Franklin Floating

Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Franklin Floating 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 Armada Hflr and Franklin Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Armada Hflr Pr and Franklin Floating Rate, you can compare the effects of market volatilities on Armada Hflr and Franklin Floating 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 Armada Hflr with a short position of Franklin Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Franklin Floating.

Diversification Opportunities for Armada Hflr and Franklin Floating

-0.45

Correlation Coefficient

Armada Hflr  Franklin Floating

Very good diversification

The 3 months correlation between Armada and Franklin is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Franklin Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Floating Rate and Armada Hflr 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 Armada Hflr Pr are associated (or correlated) with Franklin Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Floating Rate has no effect on the direction of Armada Hflr i.e., Armada Hflr and Franklin Floating go up and down completely randomly.

Pair Corralation between Armada Hflr and Franklin Floating

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Franklin Floating. In addition to that, Armada Hflr is 16.93 times more volatile than Franklin Floating Rate. It trades about -0.07 of its total potential returns per unit of risk. Franklin Floating Rate is currently generating about 0.41 per unit of volatility. If you would invest  676.00  in Franklin Floating Rate on September 18, 2024 and sell it today you would earn a total of  16.00  from holding Franklin Floating Rate or generate 2.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Armada Hflr Pr  vs.  Franklin Floating Rate

Armada Hflr Pr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Franklin Floating Rate

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Floating Rate are ranked lower than 31 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Franklin Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and Franklin Floating

The main advantage of trading using opposite Armada Hflr and Franklin Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Franklin Floating 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 Floating will offset losses from the drop in Franklin Floating's long position.

The idea behind Armada Hflr Pr and Franklin Floating Rate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.