Correlation Between Franklin Growth and Franklin Growth

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

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

Diversification Opportunities for Franklin Growth and Franklin Growth

0.99

Correlation Coefficient

Franklin Growth  Franklin Growth

No risk reduction

The 3 months correlation between Franklin and Franklin is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Opportunities and Franklin Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth and Franklin Growth 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 Franklin Growth Opportunities are associated (or correlated) with Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth has no effect on the direction of Franklin Growth i.e., Franklin Growth and Franklin Growth go up and down completely randomly.

Pair Corralation between Franklin Growth and Franklin Growth

Assuming the 90 days horizon Franklin Growth is expected to generate 1.29 times less return on investment than Franklin Growth. In addition to that, Franklin Growth is 1.51 times more volatile than Franklin Growth Fund. It trades about 0.03 of its total potential returns per unit of risk. Franklin Growth Fund is currently generating about 0.06 per unit of volatility. If you would invest  11,021  in Franklin Growth Fund on September 12, 2024 and sell it today you would earn a total of  1,563  from holding Franklin Growth Fund or generate 14.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Franklin Growth Opportunities  vs.  Franklin Growth Fund

Franklin Growth Oppo

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Growth Opportunities are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Franklin Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Franklin Growth

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Growth Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Franklin Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Franklin Growth and Franklin Growth

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

The idea behind Franklin Growth Opportunities and Franklin Growth Fund 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.