Correlation Between Franklin Income and Fidelity Asset
Can any of the company-specific risk be diversified away by investing in both Franklin Income and Fidelity Asset 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 Income and Fidelity Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Income Fund and Fidelity Asset Manager, you can compare the effects of market volatilities on Franklin Income and Fidelity Asset 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 Income with a short position of Fidelity Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Income and Fidelity Asset.
Diversification Opportunities for Franklin Income and Fidelity Asset
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Fidelity is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Income Fund and Fidelity Asset Manager in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Asset Manager and Franklin Income 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 Income Fund are associated (or correlated) with Fidelity Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Asset Manager has no effect on the direction of Franklin Income i.e., Franklin Income and Fidelity Asset go up and down completely randomly.
Pair Corralation between Franklin Income and Fidelity Asset
Assuming the 90 days horizon Franklin Income is expected to generate 2.43 times less return on investment than Fidelity Asset. But when comparing it to its historical volatility, Franklin Income Fund is 1.11 times less risky than Fidelity Asset. It trades about 0.02 of its potential returns per unit of risk. Fidelity Asset Manager is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,935 in Fidelity Asset Manager on January 20, 2024 and sell it today you would earn a total of 23.00 from holding Fidelity Asset Manager or generate 1.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.78% |
Values | Daily Returns |
Franklin Income Fund vs. Fidelity Asset Manager
Performance |
Timeline |
Franklin Me Fund |
Fidelity Asset Manager |
Franklin Income and Fidelity Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Income and Fidelity Asset
The main advantage of trading using opposite Franklin Income and Fidelity Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Income position performs unexpectedly, Fidelity Asset 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 Fidelity Asset will offset losses from the drop in Fidelity Asset's long position.Franklin Income vs. Franklin Mutual Beacon | Franklin Income vs. Templeton Developing Markets | Franklin Income vs. Franklin Mutual Global | Franklin Income vs. Franklin Mutual Global |
Fidelity Asset vs. Fidelity Freedom 2015 | Fidelity Asset vs. Fidelity Pennsylvania Municipal | Fidelity Asset vs. Fidelity Freedom Index | Fidelity Asset vs. Fidelity Freedom Index |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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