Correlation Between Franklin Income and Crossmark Steward

Can any of the company-specific risk be diversified away by investing in both Franklin Income and Crossmark Steward 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 Crossmark Steward 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 Crossmark Steward Equity, you can compare the effects of market volatilities on Franklin Income and Crossmark Steward 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 Crossmark Steward. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Income and Crossmark Steward.

Diversification Opportunities for Franklin Income and Crossmark Steward

0.61

Correlation Coefficient

Franklin Income  Crossmark Steward

Poor diversification

The 3 months correlation between Franklin and Crossmark is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Income Fund and Crossmark Steward Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crossmark Steward Equity 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 Crossmark Steward. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crossmark Steward Equity has no effect on the direction of Franklin Income i.e., Franklin Income and Crossmark Steward go up and down completely randomly.

Pair Corralation between Franklin Income and Crossmark Steward

Assuming the 90 days horizon Franklin Income is expected to generate 116.5 times less return on investment than Crossmark Steward. But when comparing it to its historical volatility, Franklin Income Fund is 1.51 times less risky than Crossmark Steward. It trades about 0.0 of its potential returns per unit of risk. Crossmark Steward Equity is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2,875  in Crossmark Steward Equity on January 20, 2024 and sell it today you would earn a total of  84.00  from holding Crossmark Steward Equity or generate 2.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Franklin Income Fund  vs.  Crossmark Steward Equity

Franklin Me Fund

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Income Fund are ranked lower than 1 (%) 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.

Crossmark Steward Equity

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Crossmark Steward Equity are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Crossmark Steward is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Franklin Income and Crossmark Steward

The main advantage of trading using opposite Franklin Income and Crossmark Steward positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Income position performs unexpectedly, Crossmark Steward 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 Crossmark Steward will offset losses from the drop in Crossmark Steward's long position.

The idea behind Franklin Income Fund and Crossmark Steward Equity 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.