Correlation Between Franklin California and Harbor Diversified

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

By analyzing existing cross correlation between Franklin California High and Harbor Diversified International, you can compare the effects of market volatilities on Franklin California and Harbor Diversified 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 California with a short position of Harbor Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin California and Harbor Diversified.

Diversification Opportunities for Franklin California and Harbor Diversified

-0.42

Correlation Coefficient

Franklin California  Harbor Diversified

Very good diversification

The 3 months correlation between Franklin and Harbor is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Franklin California High and Harbor Diversified Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Diversified and Franklin California 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 California High are associated (or correlated) with Harbor Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Diversified has no effect on the direction of Franklin California i.e., Franklin California and Harbor Diversified go up and down completely randomly.

Pair Corralation between Franklin California and Harbor Diversified

Assuming the 90 days horizon Franklin California High is expected to under-perform the Harbor Diversified. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin California High is 3.24 times less risky than Harbor Diversified. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Harbor Diversified International is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,316  in Harbor Diversified International on May 6, 2025 and sell it today you would earn a total of  104.00  from holding Harbor Diversified International or generate 7.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Franklin California High  vs.  Harbor Diversified Internation

Franklin California High

Risk-Adjusted Performance

Very Weak

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

Harbor Diversified

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor Diversified International are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Harbor Diversified may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Franklin California and Harbor Diversified

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

The idea behind Franklin California High and Harbor Diversified International 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.