Correlation Between Franklin Liberty and PIMCO ETF
Can any of the company-specific risk be diversified away by investing in both Franklin Liberty and PIMCO ETF 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 Liberty and PIMCO ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Liberty Treasury and PIMCO ETF Trust, you can compare the effects of market volatilities on Franklin Liberty and PIMCO ETF 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 Liberty with a short position of PIMCO ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Liberty and PIMCO ETF.
Diversification Opportunities for Franklin Liberty and PIMCO ETF
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and PIMCO is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Liberty Treasury and PIMCO ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO ETF Trust and Franklin Liberty 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 Liberty Treasury are associated (or correlated) with PIMCO ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO ETF Trust has no effect on the direction of Franklin Liberty i.e., Franklin Liberty and PIMCO ETF go up and down completely randomly.
Pair Corralation between Franklin Liberty and PIMCO ETF
Given the investment horizon of 90 days Franklin Liberty Treasury is expected to under-perform the PIMCO ETF. In addition to that, Franklin Liberty is 16.24 times more volatile than PIMCO ETF Trust. It trades about -0.02 of its total potential returns per unit of risk. PIMCO ETF Trust is currently generating about 1.07 per unit of volatility. If you would invest 9,924 in PIMCO ETF Trust on September 5, 2024 and sell it today you would earn a total of 164.00 from holding PIMCO ETF Trust or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Liberty Treasury vs. PIMCO ETF Trust
Performance |
| Timeline |
| Franklin Liberty Treasury |
| PIMCO ETF Trust |
Franklin Liberty and PIMCO ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Liberty and PIMCO ETF
The main advantage of trading using opposite Franklin Liberty and PIMCO ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Liberty position performs unexpectedly, PIMCO ETF 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 PIMCO ETF will offset losses from the drop in PIMCO ETF's long position.| Franklin Liberty vs. iShares 10 20 Year | Franklin Liberty vs. iShares 7 10 Year | Franklin Liberty vs. iShares 1 3 Year | Franklin Liberty vs. iShares Short Treasury |
| PIMCO ETF vs. Global X Funds | PIMCO ETF vs. US Treasury 12 | PIMCO ETF vs. Tidal Trust II | PIMCO ETF vs. Franklin Liberty Treasury |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |