Correlation Between Ftfa Franklin and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Ftfa Franklin and Legg Mason 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 Ftfa Franklin and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ftfa Franklin Templeton Growth and Legg Mason Partners, you can compare the effects of market volatilities on Ftfa Franklin and Legg Mason 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 Ftfa Franklin with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ftfa Franklin and Legg Mason.
Diversification Opportunities for Ftfa Franklin and Legg Mason
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ftfa and Legg is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ftfa Franklin Templeton Growth and Legg Mason Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Partners and Ftfa Franklin 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 Ftfa Franklin Templeton Growth are associated (or correlated) with Legg Mason. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legg Mason Partners has no effect on the direction of Ftfa Franklin i.e., Ftfa Franklin and Legg Mason go up and down completely randomly.
Pair Corralation between Ftfa Franklin and Legg Mason
Assuming the 90 days horizon Ftfa Franklin Templeton Growth is expected to generate 0.18 times more return on investment than Legg Mason. However, Ftfa Franklin Templeton Growth is 5.6 times less risky than Legg Mason. It trades about 0.17 of its potential returns per unit of risk. Legg Mason Partners is currently generating about -0.22 per unit of risk. If you would invest 2,103 in Ftfa Franklin Templeton Growth on September 13, 2024 and sell it today you would earn a total of 29.00 from holding Ftfa Franklin Templeton Growth or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ftfa Franklin Templeton Growth vs. Legg Mason Partners
Performance |
| Timeline |
| Ftfa Franklin Templeton |
| Legg Mason Partners |
Ftfa Franklin and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ftfa Franklin and Legg Mason
The main advantage of trading using opposite Ftfa Franklin and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ftfa Franklin position performs unexpectedly, Legg Mason 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 Legg Mason will offset losses from the drop in Legg Mason's long position.| Ftfa Franklin vs. Lord Abbett Small | Ftfa Franklin vs. Ab Discovery Value | Ftfa Franklin vs. Royce Opportunity Fund | Ftfa Franklin vs. Vanguard Small Cap Value |
| Legg Mason vs. Western Asset Diversified | Legg Mason vs. Pimco Diversified Income | Legg Mason vs. Lord Abbett Diversified | Legg Mason vs. Delaware Limited Term Diversified |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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