Correlation Between EA Series and Franklin Liberty
Can any of the company-specific risk be diversified away by investing in both EA Series 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 EA Series and Franklin Liberty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EA Series Trust and Franklin Liberty Systematic, you can compare the effects of market volatilities on EA Series 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 EA Series with a short position of Franklin Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Franklin Liberty.
Diversification Opportunities for EA Series and Franklin Liberty
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between DRAI and Franklin is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Franklin Liberty Systematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty Sys and EA Series 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 EA Series Trust 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 Sys has no effect on the direction of EA Series i.e., EA Series and Franklin Liberty go up and down completely randomly.
Pair Corralation between EA Series and Franklin Liberty
Given the investment horizon of 90 days EA Series Trust is expected to generate 1.59 times more return on investment than Franklin Liberty. However, EA Series is 1.59 times more volatile than Franklin Liberty Systematic. It trades about 0.11 of its potential returns per unit of risk. Franklin Liberty Systematic is currently generating about 0.04 per unit of risk. If you would invest 2,407 in EA Series Trust on September 5, 2024 and sell it today you would earn a total of 47.00 from holding EA Series Trust or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EA Series Trust vs. Franklin Liberty Systematic
Performance |
| Timeline |
| EA Series Trust |
| Franklin Liberty Sys |
EA Series and Franklin Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and Franklin Liberty
The main advantage of trading using opposite EA Series and Franklin Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series 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.| EA Series vs. Vanguard Total Stock | EA Series vs. SPDR SP 500 | EA Series vs. Vanguard Total Bond | EA Series vs. Vanguard Value Index |
| Franklin Liberty vs. First Trust Multi Asset | Franklin Liberty vs. Collaborative Investment Series | Franklin Liberty vs. EA Series Trust | Franklin Liberty vs. Ocean Park International |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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