Correlation Between Franklin Liberty and IShares IBonds
Can any of the company-specific risk be diversified away by investing in both Franklin Liberty and IShares IBonds 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 IShares IBonds 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 iShares iBonds Dec, you can compare the effects of market volatilities on Franklin Liberty and IShares IBonds 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 IShares IBonds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Liberty and IShares IBonds.
Diversification Opportunities for Franklin Liberty and IShares IBonds
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Franklin and IShares is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Liberty Treasury and iShares iBonds Dec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares iBonds Dec 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 IShares IBonds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares iBonds Dec has no effect on the direction of Franklin Liberty i.e., Franklin Liberty and IShares IBonds go up and down completely randomly.
Pair Corralation between Franklin Liberty and IShares IBonds
Given the investment horizon of 90 days Franklin Liberty Treasury is expected to generate 0.78 times more return on investment than IShares IBonds. However, Franklin Liberty Treasury is 1.29 times less risky than IShares IBonds. It trades about 0.09 of its potential returns per unit of risk. iShares iBonds Dec is currently generating about 0.04 per unit of risk. If you would invest 1,975 in Franklin Liberty Treasury on August 29, 2024 and sell it today you would earn a total of 75.00 from holding Franklin Liberty Treasury or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 93.65% |
| Values | Daily Returns |
Franklin Liberty Treasury vs. iShares iBonds Dec
Performance |
| Timeline |
| Franklin Liberty Treasury |
| iShares iBonds Dec |
Franklin Liberty and IShares IBonds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Liberty and IShares IBonds
The main advantage of trading using opposite Franklin Liberty and IShares IBonds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Liberty position performs unexpectedly, IShares IBonds 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 IShares IBonds will offset losses from the drop in IShares IBonds' long position.| Franklin Liberty vs. Franklin Templeton ETF | Franklin Liberty vs. Franklin Liberty Investment | Franklin Liberty vs. Franklin Liberty International | Franklin Liberty vs. Franklin Liberty Intermediate |
| IShares IBonds vs. Global X Funds | IShares IBonds vs. US Treasury 12 | IShares IBonds vs. Tidal Trust II | IShares IBonds 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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