Correlation Between Franklin Income and Jpmorgan Investor

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Franklin Income and Jpmorgan Investor 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 Jpmorgan Investor 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 Jpmorgan Investor Servative, you can compare the effects of market volatilities on Franklin Income and Jpmorgan Investor 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 Jpmorgan Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Income and Jpmorgan Investor.

Diversification Opportunities for Franklin Income and Jpmorgan Investor

0.74
  Correlation Coefficient

Poor diversification

The 3 months correlation between Franklin and Jpmorgan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding FRANKLIN INCOME FUND and JPMORGAN INVESTOR SERVATIVE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Investor 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 Jpmorgan Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Investor has no effect on the direction of Franklin Income i.e., Franklin Income and Jpmorgan Investor go up and down completely randomly.

Pair Corralation between Franklin Income and Jpmorgan Investor

Assuming the 90 days horizon Franklin Income Fund is expected to generate 1.25 times more return on investment than Jpmorgan Investor. However, Franklin Income is 1.25 times more volatile than Jpmorgan Investor Servative. It trades about 0.39 of its potential returns per unit of risk. Jpmorgan Investor Servative is currently generating about 0.27 per unit of risk. If you would invest  223.00  in Franklin Income Fund on December 29, 2023 and sell it today you would earn a total of  6.00  from holding Franklin Income Fund or generate 2.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.65%
ValuesDaily Returns

FRANKLIN INCOME FUND  vs.  JPMORGAN INVESTOR SERVATIVE

 Performance 
       Timeline  
Franklin Income Fund 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Income Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Franklin Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Jpmorgan Investor 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Investor Servative are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Jpmorgan Investor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Franklin Income and Jpmorgan Investor Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Franklin Income and Jpmorgan Investor

The main advantage of trading using opposite Franklin Income and Jpmorgan Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Income position performs unexpectedly, Jpmorgan Investor 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 Jpmorgan Investor will offset losses from the drop in Jpmorgan Investor's long position.
The idea behind Franklin Income Fund and Jpmorgan Investor Servative 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Other Complementary Tools

Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Bonds Directory
Find actively traded corporate debentures issued by US companies
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume