Correlation Between IShares Agency and Franklin Liberty
Can any of the company-specific risk be diversified away by investing in both IShares Agency and Franklin Liberty 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 IShares Agency and Franklin Liberty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Agency Bond and Franklin Liberty Short, you can compare the effects of market volatilities on IShares Agency and Franklin Liberty 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 IShares Agency with a short position of Franklin Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Agency and Franklin Liberty.
Diversification Opportunities for IShares Agency and Franklin Liberty
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and Franklin is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding iShares Agency Bond and Franklin Liberty Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty Short and IShares Agency 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 iShares Agency Bond are associated (or correlated) with Franklin Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Liberty Short has no effect on the direction of IShares Agency i.e., IShares Agency and Franklin Liberty go up and down completely randomly.
Pair Corralation between IShares Agency and Franklin Liberty
Considering the 90-day investment horizon IShares Agency is expected to generate 1.15 times less return on investment than Franklin Liberty. In addition to that, IShares Agency is 2.41 times more volatile than Franklin Liberty Short. It trades about 0.1 of its total potential returns per unit of risk. Franklin Liberty Short is currently generating about 0.27 per unit of volatility. If you would invest 8,562 in Franklin Liberty Short on August 24, 2024 and sell it today you would earn a total of 477.00 from holding Franklin Liberty Short or generate 5.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Agency Bond vs. Franklin Liberty Short
Performance |
| Timeline |
| iShares Agency Bond |
| Franklin Liberty Short |
IShares Agency and Franklin Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Agency and Franklin Liberty
The main advantage of trading using opposite IShares Agency and Franklin Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Agency position performs unexpectedly, Franklin Liberty 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 Liberty will offset losses from the drop in Franklin Liberty's long position.| IShares Agency vs. iShares Intermediate GovernmentCredit | IShares Agency vs. iShares GovernmentCredit Bond | IShares Agency vs. iShares New York | IShares Agency vs. iShares California Muni |
| Franklin Liberty vs. iShares 1 3 Year | Franklin Liberty vs. SPDR Barclays Short | Franklin Liberty vs. iShares Agency Bond | Franklin Liberty vs. Rbb Fund |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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