Correlation Between Franklin Income and The Hartford
Can any of the company-specific risk be diversified away by investing in both Franklin Income and The Hartford 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 The Hartford 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 The Hartford Balanced, you can compare the effects of market volatilities on Franklin Income and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Income and The Hartford.
Diversification Opportunities for Franklin Income and The Hartford
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and The is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Income Fund and The Hartford Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Balanced 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Balanced has no effect on the direction of Franklin Income i.e., Franklin Income and The Hartford go up and down completely randomly.
Pair Corralation between Franklin Income and The Hartford
Assuming the 90 days horizon Franklin Income Fund is expected to generate 1.03 times more return on investment than The Hartford. However, Franklin Income is 1.03 times more volatile than The Hartford Balanced. It trades about -0.08 of its potential returns per unit of risk. The Hartford Balanced is currently generating about -0.12 per unit of risk. If you would invest 230.00 in Franklin Income Fund on January 25, 2024 and sell it today you would lose (2.00) from holding Franklin Income Fund or give up 0.87% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Income Fund vs. The Hartford Balanced
Performance |
Timeline |
Franklin Me Fund |
Hartford Balanced |
Franklin Income and The Hartford Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Income and The Hartford
The main advantage of trading using opposite Franklin Income and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Income position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.Franklin Income vs. Fidelity Strategic Dividend | Franklin Income vs. HUMANA INC | Franklin Income vs. Aquagold International | Franklin Income vs. Morningstar Unconstrained Allocation |
The Hartford vs. Vanguard Wellesley Income | The Hartford vs. Blackrock Multi Asset Income | The Hartford vs. The Hartford Balanced | The Hartford vs. The Hartford Balanced |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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