Correlation Between Franklin Templeton and FlexShares Real
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and FlexShares Real 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 Templeton and FlexShares Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton Investments and FlexShares Real Assets, you can compare the effects of market volatilities on Franklin Templeton and FlexShares Real 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 Templeton with a short position of FlexShares Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and FlexShares Real.
Diversification Opportunities for Franklin Templeton and FlexShares Real
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and FlexShares is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Investments and FlexShares Real Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares Real Assets and Franklin Templeton 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 Templeton Investments are associated (or correlated) with FlexShares Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares Real Assets has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and FlexShares Real go up and down completely randomly.
Pair Corralation between Franklin Templeton and FlexShares Real
If you would invest 3,147 in FlexShares Real Assets on September 2, 2024 and sell it today you would earn a total of 95.00 from holding FlexShares Real Assets or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 1.56% |
| Values | Daily Returns |
Franklin Templeton Investments vs. FlexShares Real Assets
Performance |
| Timeline |
| Franklin Templeton |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| FlexShares Real Assets |
Franklin Templeton and FlexShares Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and FlexShares Real
The main advantage of trading using opposite Franklin Templeton and FlexShares Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, FlexShares Real 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 FlexShares Real will offset losses from the drop in FlexShares Real's long position.The idea behind Franklin Templeton Investments and FlexShares Real Assets 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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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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