Correlation Between Franklin Resources and OneMain Holdings
Can any of the company-specific risk be diversified away by investing in both Franklin Resources and OneMain Holdings 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 Resources and OneMain Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Resources and OneMain Holdings, you can compare the effects of market volatilities on Franklin Resources and OneMain Holdings 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 Resources with a short position of OneMain Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Resources and OneMain Holdings.
Diversification Opportunities for Franklin Resources and OneMain Holdings
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and OneMain is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Resources and OneMain Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneMain Holdings and Franklin Resources 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 Resources are associated (or correlated) with OneMain Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneMain Holdings has no effect on the direction of Franklin Resources i.e., Franklin Resources and OneMain Holdings go up and down completely randomly.
Pair Corralation between Franklin Resources and OneMain Holdings
Considering the 90-day investment horizon Franklin Resources is expected to under-perform the OneMain Holdings. In addition to that, Franklin Resources is 1.25 times more volatile than OneMain Holdings. It trades about -0.15 of its total potential returns per unit of risk. OneMain Holdings is currently generating about -0.02 per unit of volatility. If you would invest 4,855 in OneMain Holdings on March 7, 2024 and sell it today you would lose (96.00) from holding OneMain Holdings or give up 1.98% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
Franklin Resources vs. OneMain Holdings
Performance |
Timeline |
Franklin Resources |
OneMain Holdings |
Franklin Resources and OneMain Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Resources and OneMain Holdings
The main advantage of trading using opposite Franklin Resources and OneMain Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Resources position performs unexpectedly, OneMain Holdings 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 OneMain Holdings will offset losses from the drop in OneMain Holdings' long position.Franklin Resources vs. Federated Premier Municipal | Franklin Resources vs. Blackrock Muniyield | Franklin Resources vs. NXG NextGen Infrastructure | Franklin Resources vs. BlackRock Capital Allocation |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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