Correlation Between Franklin Utilities and Franklin Double

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

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

Diversification Opportunities for Franklin Utilities and Franklin Double

0.0

Correlation Coefficient

Franklin Utilities  Franklin Double

Pay attention - limited upside

The 3 months correlation between Franklin and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Utilities and Franklin Double Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Double Tax and Franklin Utilities 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 Utilities are associated (or correlated) with Franklin Double. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Double Tax has no effect on the direction of Franklin Utilities i.e., Franklin Utilities and Franklin Double go up and down completely randomly.

Pair Corralation between Franklin Utilities and Franklin Double

If you would invest  2,342  in Franklin Utilities on September 2, 2024 and sell it today you would earn a total of  255.00  from holding Franklin Utilities or generate 10.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Franklin Utilities  vs.  Franklin Double Tax Free

Franklin Utilities

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Utilities are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Franklin Utilities may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Franklin Double Tax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Double Tax Free has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Franklin Double 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 Utilities and Franklin Double

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

The idea behind Franklin Utilities and Franklin Double Tax Free 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.