Correlation Between Franklin Growth and Tfa Alphagen

Can any of the company-specific risk be diversified away by investing in both Franklin Growth and Tfa Alphagen 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 Tfa Alphagen 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 Tfa Alphagen Growth, you can compare the effects of market volatilities on Franklin Growth and Tfa Alphagen 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 Tfa Alphagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Tfa Alphagen.

Diversification Opportunities for Franklin Growth and Tfa Alphagen

0.94

Correlation Coefficient

Franklin Growth  Tfa Alphagen

Almost no diversification

The 3 months correlation between Franklin and Tfa is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Opportunities and Tfa Alphagen Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tfa Alphagen 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 Tfa Alphagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tfa Alphagen Growth has no effect on the direction of Franklin Growth i.e., Franklin Growth and Tfa Alphagen go up and down completely randomly.

Pair Corralation between Franklin Growth and Tfa Alphagen

Assuming the 90 days horizon Franklin Growth Opportunities is expected to generate 1.31 times more return on investment than Tfa Alphagen. However, Franklin Growth is 1.31 times more volatile than Tfa Alphagen Growth. It trades about 0.18 of its potential returns per unit of risk. Tfa Alphagen Growth is currently generating about 0.22 per unit of risk. If you would invest  5,711  in Franklin Growth Opportunities on September 4, 2024 and sell it today you would earn a total of  633.00  from holding Franklin Growth Opportunities or generate 11.08% return on investment over 90 days.

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

Franklin Growth Opportunities  vs.  Tfa Alphagen Growth

Franklin Growth Oppo

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Growth Opportunities are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Franklin Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tfa Alphagen Growth

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tfa Alphagen Growth are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Tfa Alphagen may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Franklin Growth and Tfa Alphagen

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

The idea behind Franklin Growth Opportunities and Tfa Alphagen Growth 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.