Correlation Between IShares ESG and Franklin Liberty
Can any of the company-specific risk be diversified away by investing in both IShares ESG 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 ESG 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 ESG Advanced and Franklin Liberty Investment, you can compare the effects of market volatilities on IShares ESG 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 ESG with a short position of Franklin Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and Franklin Liberty.
Diversification Opportunities for IShares ESG and Franklin Liberty
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and Franklin is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Advanced and Franklin Liberty Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty Inv and IShares ESG 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 ESG Advanced 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 Inv has no effect on the direction of IShares ESG i.e., IShares ESG and Franklin Liberty go up and down completely randomly.
Pair Corralation between IShares ESG and Franklin Liberty
Given the investment horizon of 90 days IShares ESG is expected to generate 1.02 times less return on investment than Franklin Liberty. In addition to that, IShares ESG is 1.2 times more volatile than Franklin Liberty Investment. It trades about 0.03 of its total potential returns per unit of risk. Franklin Liberty Investment is currently generating about 0.04 per unit of volatility. If you would invest 1,987 in Franklin Liberty Investment on August 29, 2024 and sell it today you would earn a total of 171.00 from holding Franklin Liberty Investment or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares ESG Advanced vs. Franklin Liberty Investment
Performance |
| Timeline |
| iShares ESG Advanced |
| Franklin Liberty Inv |
IShares ESG and Franklin Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and Franklin Liberty
The main advantage of trading using opposite IShares ESG and Franklin Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG 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 ESG vs. Schwab 1 5 Year | IShares ESG vs. Schwab Long Term Treasury | IShares ESG vs. Schwab Intermediate Term Treasury | IShares ESG vs. Schwab Short Term Treasury |
| Franklin Liberty vs. Franklin Liberty Short | Franklin Liberty vs. Goldman Sachs Access | Franklin Liberty vs. Franklin Templeton ETF | Franklin Liberty vs. Franklin Liberty Federal |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |