Correlation Between Us Government and Franklin

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Can any of the company-specific risk be diversified away by investing in both Us Government and Franklin 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 Us Government and Franklin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Securities and Franklin Us Government, you can compare the effects of market volatilities on Us Government and Franklin 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 Us Government with a short position of Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Franklin.

Diversification Opportunities for Us Government and Franklin

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between RGVAX and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding US GOVERNMENT SECURITIES and Franklin US Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Us Government and Us Government 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 Us Government Securities are associated (or correlated) with Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Us Government has no effect on the direction of Us Government i.e., Us Government and Franklin go up and down completely randomly.

Pair Corralation between Us Government and Franklin

If you would invest  1,179  in Us Government Securities on December 30, 2023 and sell it today you would earn a total of  4.00  from holding Us Government Securities or generate 0.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

US GOVERNMENT SECURITIES  vs.  Franklin US Government

 Performance 
       Timeline  
Us Government Securities 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Us Government Securities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Us Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Franklin Us Government 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Franklin Us Government has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Franklin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Us Government and Franklin Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Us Government and Franklin

The main advantage of trading using opposite Us Government and Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government position performs unexpectedly, Franklin 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 will offset losses from the drop in Franklin's long position.
The idea behind Us Government Securities and Franklin Us Government 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.
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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