Correlation Between Franklin Federal and Templeton Growth
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Templeton Growth 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 Federal and Templeton Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Federal Tax Free and Templeton Growth Fund, you can compare the effects of market volatilities on Franklin Federal and Templeton Growth 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 Federal with a short position of Templeton Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Templeton Growth.
Diversification Opportunities for Franklin Federal and Templeton Growth
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Templeton is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Tax Free and Templeton Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Growth and Franklin Federal 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 Federal Tax Free are associated (or correlated) with Templeton Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Growth has no effect on the direction of Franklin Federal i.e., Franklin Federal and Templeton Growth go up and down completely randomly.
Pair Corralation between Franklin Federal and Templeton Growth
Assuming the 90 days horizon Franklin Federal Tax Free is expected to under-perform the Templeton Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Federal Tax Free is 2.8 times less risky than Templeton Growth. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Templeton Growth Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,623 in Templeton Growth Fund on November 5, 2024 and sell it today you would earn a total of 47.00 from holding Templeton Growth Fund or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Federal Tax Free vs. Templeton Growth Fund
Performance |
| Timeline |
| Franklin Federal Tax |
| Templeton Growth |
Franklin Federal and Templeton Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Templeton Growth
The main advantage of trading using opposite Franklin Federal and Templeton Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Templeton Growth 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 Templeton Growth will offset losses from the drop in Templeton Growth's long position.| Franklin Federal vs. Gmo Quality Fund | Franklin Federal vs. Tfa Alphagen Growth | Franklin Federal vs. Eip Growth And | Franklin Federal vs. Vanguard Growth And |
| Templeton Growth vs. Voya Solution Conservative | Templeton Growth vs. Allianzgi Diversified Income | Templeton Growth vs. Jhancock Diversified Macro | Templeton Growth vs. Diversified Income 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |