Correlation Between Franklin Strategic and Blackrock Debt
Can any of the company-specific risk be diversified away by investing in both Franklin Strategic and Blackrock Debt 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 Strategic and Blackrock Debt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Strategic Mortgage and Blackrock Debt Strategies, you can compare the effects of market volatilities on Franklin Strategic and Blackrock Debt 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 Strategic with a short position of Blackrock Debt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Strategic and Blackrock Debt.
Diversification Opportunities for Franklin Strategic and Blackrock Debt
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Blackrock is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Strategic Mortgage and Blackrock Debt Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Debt Strategies and Franklin Strategic 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 Strategic Mortgage are associated (or correlated) with Blackrock Debt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Debt Strategies has no effect on the direction of Franklin Strategic i.e., Franklin Strategic and Blackrock Debt go up and down completely randomly.
Pair Corralation between Franklin Strategic and Blackrock Debt
Assuming the 90 days horizon Franklin Strategic is expected to generate 3.11 times less return on investment than Blackrock Debt. But when comparing it to its historical volatility, Franklin Strategic Mortgage is 2.34 times less risky than Blackrock Debt. It trades about 0.2 of its potential returns per unit of risk. Blackrock Debt Strategies is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,074 in Blackrock Debt Strategies on June 29, 2024 and sell it today you would earn a total of 31.00 from holding Blackrock Debt Strategies or generate 2.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Franklin Strategic Mortgage vs. Blackrock Debt Strategies
Performance |
Timeline |
Franklin Strategic |
Blackrock Debt Strategies |
Franklin Strategic and Blackrock Debt Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Strategic and Blackrock Debt
The main advantage of trading using opposite Franklin Strategic and Blackrock Debt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Strategic position performs unexpectedly, Blackrock Debt 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 Blackrock Debt will offset losses from the drop in Blackrock Debt's long position.Franklin Strategic vs. Total Return Fund | Franklin Strategic vs. Total Return Fund | Franklin Strategic vs. Dodge Income Fund | Franklin Strategic vs. HUMANA INC |
Blackrock Debt vs. Blackrock Floating Rate | Blackrock Debt vs. Pioneer Floating Rate | Blackrock Debt vs. Eaton Vance Senior | Blackrock Debt vs. Eaton Vance Senior |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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