Correlation Between Franklin Louisiana and Clearbridge Mid

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

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

Diversification Opportunities for Franklin Louisiana and Clearbridge Mid

-0.56

Correlation Coefficient

Franklin Louisiana  Clearbridge Mid

Excellent diversification

The 3 months correlation between Franklin and Clearbridge is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Louisiana Tax Free and Clearbridge Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Mid Cap and Franklin Louisiana 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 Louisiana Tax Free are associated (or correlated) with Clearbridge Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Mid Cap has no effect on the direction of Franklin Louisiana i.e., Franklin Louisiana and Clearbridge Mid go up and down completely randomly.

Pair Corralation between Franklin Louisiana and Clearbridge Mid

Assuming the 90 days horizon Franklin Louisiana Tax Free is expected to generate 0.2 times more return on investment than Clearbridge Mid. However, Franklin Louisiana Tax Free is 5.12 times less risky than Clearbridge Mid. It trades about 0.43 of its potential returns per unit of risk. Clearbridge Mid Cap is currently generating about -0.02 per unit of risk. If you would invest  966.00  in Franklin Louisiana Tax Free on September 3, 2025 and sell it today you would earn a total of  46.00  from holding Franklin Louisiana Tax Free or generate 4.76% return on investment over 90 days.

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

Franklin Louisiana Tax Free  vs.  Clearbridge Mid Cap

Franklin Louisiana Tax

Risk-Adjusted Performance

High

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Louisiana Tax Free are ranked lower than 33 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Franklin Louisiana is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Clearbridge Mid Cap

Risk-Adjusted Performance

Weakest

Over the last 90 days Clearbridge Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Clearbridge Mid 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 Louisiana and Clearbridge Mid

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

The idea behind Franklin Louisiana Tax Free and Clearbridge Mid Cap 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.