Correlation Between Franklin Government and Pace Municipal
Can any of the company-specific risk be diversified away by investing in both Franklin Government and Pace Municipal 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 Government and Pace Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Government Money and Pace Municipal Fixed, you can compare the effects of market volatilities on Franklin Government and Pace Municipal 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 Government with a short position of Pace Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Government and Pace Municipal.
Diversification Opportunities for Franklin Government and Pace Municipal
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Pace is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Pace Municipal Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Municipal Fixed and Franklin Government 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 Government Money are associated (or correlated) with Pace Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Municipal Fixed has no effect on the direction of Franklin Government i.e., Franklin Government and Pace Municipal go up and down completely randomly.
Pair Corralation between Franklin Government and Pace Municipal
If you would invest 1,220 in Pace Municipal Fixed on September 28, 2024 and sell it today you would earn a total of 0.00 from holding Pace Municipal Fixed or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Government Money vs. Pace Municipal Fixed
Performance |
Timeline |
Franklin Government Money |
Pace Municipal Fixed |
Franklin Government and Pace Municipal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Government and Pace Municipal
The main advantage of trading using opposite Franklin Government and Pace Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Government position performs unexpectedly, Pace Municipal 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 Pace Municipal will offset losses from the drop in Pace Municipal's long position.Franklin Government vs. The National Tax Free | Franklin Government vs. Touchstone Premium Yield | Franklin Government vs. T Rowe Price | Franklin Government vs. Ambrus Core Bond |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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