Correlation Between Bondbloxx ETF and Franklin High

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

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

Diversification Opportunities for Bondbloxx ETF and Franklin High

0.07

Correlation Coefficient

Bondbloxx ETF  Franklin High

Significant diversification

The 3 months correlation between Bondbloxx and Franklin is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and Franklin High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Income and Bondbloxx ETF 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 Bondbloxx ETF Trust are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Income has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and Franklin High go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and Franklin High

Given the investment horizon of 90 days Bondbloxx ETF Trust is expected to under-perform the Franklin High. But the etf apears to be less risky and, when comparing its historical volatility, Bondbloxx ETF Trust is 2.19 times less risky than Franklin High. The etf trades about -0.05 of its potential returns per unit of risk. The Franklin High Income is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  175.00  in Franklin High Income on September 13, 2024 and sell it today you would earn a total of  1.00  from holding Franklin High Income or generate 0.57% return on investment over 90 days.

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

Bondbloxx ETF Trust  vs.  Franklin High Income

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bondbloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Bondbloxx ETF is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Franklin High Income

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin High Income are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Franklin High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bondbloxx ETF and Franklin High

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

The idea behind Bondbloxx ETF Trust and Franklin High 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.