Correlation Between Franklin Liberty and Global X
Can any of the company-specific risk be diversified away by investing in both Franklin Liberty and Global X 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 Global X 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 Global X Funds, you can compare the effects of market volatilities on Franklin Liberty and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Liberty and Global X.
Diversification Opportunities for Franklin Liberty and Global X
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Global is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Liberty Treasury and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of Franklin Liberty i.e., Franklin Liberty and Global X go up and down completely randomly.
Pair Corralation between Franklin Liberty and Global X
Given the investment horizon of 90 days Franklin Liberty is expected to generate 11.19 times less return on investment than Global X. But when comparing it to its historical volatility, Franklin Liberty Treasury is 2.6 times less risky than Global X. It trades about 0.01 of its potential returns per unit of risk. Global X Funds is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,668 in Global X Funds on August 29, 2024 and sell it today you would earn a total of 54.00 from holding Global X Funds or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Liberty Treasury vs. Global X Funds
Performance |
| Timeline |
| Franklin Liberty Treasury |
| Global X Funds |
Franklin Liberty and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Liberty and Global X
The main advantage of trading using opposite Franklin Liberty and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Liberty position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's 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 |
| Global X vs. Global X Funds | Global X vs. US Treasury 12 | Global X vs. Tidal Trust II | Global X 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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