Correlation Between Franklin Templeton and Franklin Liberty
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton 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 Franklin Templeton and Franklin Liberty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton ETF and Franklin Liberty Short, you can compare the effects of market volatilities on Franklin Templeton 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 Franklin Templeton with a short position of Franklin Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Franklin Liberty.
Diversification Opportunities for Franklin Templeton and Franklin Liberty
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Franklin is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and Franklin Liberty Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty Short and Franklin Templeton 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 Templeton ETF 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 Short has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Franklin Liberty go up and down completely randomly.
Pair Corralation between Franklin Templeton and Franklin Liberty
Given the investment horizon of 90 days Franklin Templeton ETF is expected to generate 5.14 times more return on investment than Franklin Liberty. However, Franklin Templeton is 5.14 times more volatile than Franklin Liberty Short. It trades about 0.06 of its potential returns per unit of risk. Franklin Liberty Short is currently generating about 0.25 per unit of risk. If you would invest 2,133 in Franklin Templeton ETF on August 27, 2024 and sell it today you would earn a total of 10.00 from holding Franklin Templeton ETF or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton ETF vs. Franklin Liberty Short
Performance |
| Timeline |
| Franklin Templeton ETF |
| Franklin Liberty Short |
Franklin Templeton and Franklin Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Franklin Liberty
The main advantage of trading using opposite Franklin Templeton and Franklin Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton 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.| Franklin Templeton vs. Franklin Liberty Investment | Franklin Templeton vs. iShares ESG Aggregate | Franklin Templeton vs. Franklin LibertyQ Equity | Franklin Templeton vs. Franklin Liberty Short |
| Franklin Liberty vs. FlexShares Ready Access | Franklin Liberty vs. Franklin Liberty Investment | Franklin Liberty vs. PIMCO Enhanced Low | Franklin Liberty vs. SPDR SSgA Ultra |
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 Stocks Directory module to find actively traded stocks across global markets.
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