Correlation Between Franklin Templeton and Matthews International
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Matthews International 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 Matthews International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton ETF and Matthews International Funds, you can compare the effects of market volatilities on Franklin Templeton and Matthews International 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 Matthews International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Matthews International.
Diversification Opportunities for Franklin Templeton and Matthews International
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Matthews is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and Matthews International Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews International 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 ETF are associated (or correlated) with Matthews International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews International has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Matthews International go up and down completely randomly.
Pair Corralation between Franklin Templeton and Matthews International
Given the investment horizon of 90 days Franklin Templeton ETF is expected to generate 0.58 times more return on investment than Matthews International. However, Franklin Templeton ETF is 1.73 times less risky than Matthews International. It trades about 0.09 of its potential returns per unit of risk. Matthews International Funds is currently generating about -0.03 per unit of risk. If you would invest 2,700 in Franklin Templeton ETF on September 13, 2024 and sell it today you would earn a total of 36.87 from holding Franklin Templeton ETF or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton ETF vs. Matthews International Funds
Performance |
| Timeline |
| Franklin Templeton ETF |
| Matthews International |
Franklin Templeton and Matthews International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Matthews International
The main advantage of trading using opposite Franklin Templeton and Matthews International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Matthews International 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 Matthews International will offset losses from the drop in Matthews International's long position.| Franklin Templeton vs. Franklin Core Dividend | Franklin Templeton vs. Franklin International Core | Franklin Templeton vs. WisdomTree Trust | Franklin Templeton vs. First Trust Exchange Traded |
| Matthews International vs. Freedom Day Dividend | Matthews International vs. Franklin Templeton ETF | Matthews International vs. iShares MSCI China | Matthews International vs. Tidal Trust II |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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