Correlation Between Franklin All and Franklin India

Can any of the company-specific risk be diversified away by investing in both Franklin All and Franklin India 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 All and Franklin India into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Franklin All Cap and Franklin India Growth, you can compare the effects of market volatilities on Franklin All and Franklin India 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 All with a short position of Franklin India. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin All and Franklin India.

Diversification Opportunities for Franklin All and Franklin India

0.0

Correlation Coefficient

Franklin All  Franklin India

Pay attention - limited upside

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

Pair Corralation between Franklin All and Franklin India

If you would invest (100.00) in Franklin India Growth on August 30, 2024 and sell it today you would earn a total of  100.00  from holding Franklin India Growth or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Franklin All Cap  vs.  Franklin India Growth

Franklin All Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Franklin India Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin India Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Franklin India 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 All and Franklin India

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

The idea behind Franklin All Cap and Franklin India Growth 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.