Correlation Between Aama Equity and Franklin Rising
Can any of the company-specific risk be diversified away by investing in both Aama Equity and Franklin Rising 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 Aama Equity and Franklin Rising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aama Equity Fund and Franklin Rising Dividends, you can compare the effects of market volatilities on Aama Equity and Franklin Rising 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 Aama Equity with a short position of Franklin Rising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aama Equity and Franklin Rising.
Diversification Opportunities for Aama Equity and Franklin Rising
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aama and Franklin is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Aama Equity Fund and Franklin Rising Dividends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Rising Dividends and Aama Equity 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 Aama Equity Fund are associated (or correlated) with Franklin Rising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Rising Dividends has no effect on the direction of Aama Equity i.e., Aama Equity and Franklin Rising go up and down completely randomly.
Pair Corralation between Aama Equity and Franklin Rising
Assuming the 90 days horizon Aama Equity Fund is expected to generate 0.86 times more return on investment than Franklin Rising. However, Aama Equity Fund is 1.16 times less risky than Franklin Rising. It trades about -0.26 of its potential returns per unit of risk. Franklin Rising Dividends is currently generating about -0.32 per unit of risk. If you would invest 1,810 in Aama Equity Fund on January 20, 2024 and sell it today you would lose (55.00) from holding Aama Equity Fund or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aama Equity Fund vs. Franklin Rising Dividends
Performance |
| Timeline |
| Aama Equity Fund |
| Franklin Rising Dividends |
Aama Equity and Franklin Rising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aama Equity and Franklin Rising
The main advantage of trading using opposite Aama Equity and Franklin Rising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aama Equity position performs unexpectedly, Franklin Rising 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 Rising will offset losses from the drop in Franklin Rising's long position.| Aama Equity vs. Aama Income Fund | Aama Equity vs. Materials Portfolio Fidelity | Aama Equity vs. Vanguard Energy Fund | Aama Equity vs. Morningstar Alternatives |
| Franklin Rising vs. Franklin Mutual Beacon | Franklin Rising vs. Templeton Developing Markets | Franklin Rising vs. Franklin Mutual Global | Franklin Rising vs. Franklin Mutual Global |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |