Correlation Between Franklin Total and Templeton Foreign
Can any of the company-specific risk be diversified away by investing in both Franklin Total and Templeton Foreign 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 Total and Templeton Foreign into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Total Return and Templeton Foreign Fund, you can compare the effects of market volatilities on Franklin Total and Templeton Foreign 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 Total with a short position of Templeton Foreign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Total and Templeton Foreign.
Diversification Opportunities for Franklin Total and Templeton Foreign
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Templeton is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Total Return and Templeton Foreign Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Foreign and Franklin Total 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 Total Return are associated (or correlated) with Templeton Foreign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Foreign has no effect on the direction of Franklin Total i.e., Franklin Total and Templeton Foreign go up and down completely randomly.
Pair Corralation between Franklin Total and Templeton Foreign
Assuming the 90 days horizon Franklin Total is expected to generate 2.75 times less return on investment than Templeton Foreign. But when comparing it to its historical volatility, Franklin Total Return is 2.4 times less risky than Templeton Foreign. It trades about 0.04 of its potential returns per unit of risk. Templeton Foreign Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 682.00 in Templeton Foreign Fund on September 3, 2024 and sell it today you would earn a total of 136.00 from holding Templeton Foreign Fund or generate 19.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Total Return vs. Templeton Foreign Fund
Performance |
| Timeline |
| Franklin Total Return |
| Templeton Foreign |
Franklin Total and Templeton Foreign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Total and Templeton Foreign
The main advantage of trading using opposite Franklin Total and Templeton Foreign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Total position performs unexpectedly, Templeton Foreign 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 Foreign will offset losses from the drop in Templeton Foreign's long position.| Franklin Total vs. Fidelity Sai Convertible | Franklin Total vs. Absolute Convertible Arbitrage | Franklin Total vs. Virtus Convertible | Franklin Total vs. Gabelli Convertible And |
| Templeton Foreign vs. Pace High Yield | Templeton Foreign vs. Prudential High Yield | Templeton Foreign vs. Alpine High Yield | Templeton Foreign vs. Artisan High Income |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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