Correlation Between College Retirement and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both College Retirement and Franklin Mutual 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 College Retirement and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between College Retirement Equities and Franklin Mutual Global, you can compare the effects of market volatilities on College Retirement and Franklin Mutual 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 College Retirement with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of College Retirement and Franklin Mutual.
Diversification Opportunities for College Retirement and Franklin Mutual
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between College and Franklin is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding College Retirement Equities and Franklin Mutual Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Global and College Retirement 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 College Retirement Equities are associated (or correlated) with Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Global has no effect on the direction of College Retirement i.e., College Retirement and Franklin Mutual go up and down completely randomly.
Pair Corralation between College Retirement and Franklin Mutual
Assuming the 90 days trading horizon College Retirement Equities is expected to generate 0.9 times more return on investment than Franklin Mutual. However, College Retirement Equities is 1.11 times less risky than Franklin Mutual. It trades about 0.14 of its potential returns per unit of risk. Franklin Mutual Global is currently generating about 0.0 per unit of risk. If you would invest 36,483 in College Retirement Equities on September 26, 2024 and sell it today you would earn a total of 15,259 from holding College Retirement Equities or generate 41.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
College Retirement Equities vs. Franklin Mutual Global
Performance |
Timeline |
College Retirement |
Franklin Mutual Global |
College Retirement and Franklin Mutual Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with College Retirement and Franklin Mutual
The main advantage of trading using opposite College Retirement and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if College Retirement position performs unexpectedly, Franklin Mutual 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 Mutual will offset losses from the drop in Franklin Mutual's long position.College Retirement vs. Vanguard Total Stock | College Retirement vs. Vanguard 500 Index | College Retirement vs. Vanguard Total Stock | College Retirement vs. Vanguard Total Stock |
Franklin Mutual vs. Transamerica Cleartrack Retirement | Franklin Mutual vs. Columbia Moderate Growth | Franklin Mutual vs. College Retirement Equities | Franklin Mutual vs. Fidelity Managed Retirement |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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