Correlation Between The Hartford and Franklin Income
Can any of the company-specific risk be diversified away by investing in both The Hartford and Franklin Income 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 The Hartford and Franklin Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Balanced and Franklin Income Fund, you can compare the effects of market volatilities on The Hartford and Franklin Income 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 The Hartford with a short position of Franklin Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Franklin Income.
Diversification Opportunities for The Hartford and Franklin Income
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between The and Franklin is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Balanced and Franklin Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Me Fund and The Hartford 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 The Hartford Balanced are associated (or correlated) with Franklin Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Me Fund has no effect on the direction of The Hartford i.e., The Hartford and Franklin Income go up and down completely randomly.
Pair Corralation between The Hartford and Franklin Income
Assuming the 90 days horizon The Hartford is expected to generate 1.9 times less return on investment than Franklin Income. In addition to that, The Hartford is 1.06 times more volatile than Franklin Income Fund. It trades about 0.05 of its total potential returns per unit of risk. Franklin Income Fund is currently generating about 0.11 per unit of volatility. If you would invest 224.00 in Franklin Income Fund on January 25, 2024 and sell it today you would earn a total of 4.00 from holding Franklin Income Fund or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Balanced vs. Franklin Income Fund
Performance |
| Timeline |
| Hartford Balanced |
| Franklin Me Fund |
The Hartford and Franklin Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Franklin Income
The main advantage of trading using opposite The Hartford and Franklin Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Franklin Income 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 Income will offset losses from the drop in Franklin Income's long position.| The Hartford vs. Vanguard Wellesley Income | The Hartford vs. Blackrock Multi Asset Income | The Hartford vs. The Hartford Balanced |
| Franklin Income vs. Fidelity Strategic Dividend | Franklin Income vs. HUMANA INC | Franklin Income vs. Aquagold International | Franklin Income vs. Morningstar Unconstrained Allocation |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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