Correlation Between Franklin Real and Quantified Government

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

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

Diversification Opportunities for Franklin Real and Quantified Government

0.0

Correlation Coefficient

Franklin Real  Quantified Government

Pay attention - limited upside

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

Pair Corralation between Franklin Real and Quantified Government

If you would invest  1,676  in Franklin Real Estate on September 14, 2024 and sell it today you would earn a total of  225.00  from holding Franklin Real Estate or generate 13.42% return on investment over 90 days.

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

Franklin Real Estate  vs.  Quantified Government Income

Franklin Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Franklin Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Quantified Government

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Quantified Government Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Quantified Government 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 Real and Quantified Government

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

The idea behind Franklin Real Estate and Quantified Government Income 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.