Correlation Between Franklin Core and Arrow Investment

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

By analyzing existing cross correlation between Franklin Core Dividend and Arrow Investment Advisors, you can compare the effects of market volatilities on Franklin Core and Arrow Investment 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 Core with a short position of Arrow Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Core and Arrow Investment.

Diversification Opportunities for Franklin Core and Arrow Investment

0.69

Correlation Coefficient

Franklin Core  Arrow Investment

Poor diversification

The 3 months correlation between Franklin and Arrow is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Core Dividend and Arrow Investment Advisors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Investment Advisors and Franklin Core 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 Core Dividend are associated (or correlated) with Arrow Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Investment Advisors has no effect on the direction of Franklin Core i.e., Franklin Core and Arrow Investment go up and down completely randomly.

Pair Corralation between Franklin Core and Arrow Investment

If you would invest  4,430  in Franklin Core Dividend on September 22, 2024 and sell it today you would earn a total of  114.00  from holding Franklin Core Dividend or generate 2.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Franklin Core Dividend  vs.  Arrow Investment Advisors

Franklin Core Dividend

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Core Dividend are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable forward indicators, Franklin Core is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Arrow Investment Advisors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arrow Investment Advisors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Arrow Investment is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Franklin Core and Arrow Investment

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

The idea behind Franklin Core Dividend and Arrow Investment Advisors 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.