Correlation Between Franklin Liberty and Simplify Exchange
Can any of the company-specific risk be diversified away by investing in both Franklin Liberty and Simplify Exchange 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 Simplify Exchange 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 Simplify Exchange Traded, you can compare the effects of market volatilities on Franklin Liberty and Simplify Exchange 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 Simplify Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Liberty and Simplify Exchange.
Diversification Opportunities for Franklin Liberty and Simplify Exchange
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Simplify is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Liberty Treasury and Simplify Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Exchange Traded 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 Simplify Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Exchange Traded has no effect on the direction of Franklin Liberty i.e., Franklin Liberty and Simplify Exchange go up and down completely randomly.
Pair Corralation between Franklin Liberty and Simplify Exchange
Given the investment horizon of 90 days Franklin Liberty is expected to generate 6.79 times less return on investment than Simplify Exchange. In addition to that, Franklin Liberty is 1.19 times more volatile than Simplify Exchange Traded. It trades about 0.01 of its total potential returns per unit of risk. Simplify Exchange Traded is currently generating about 0.11 per unit of volatility. If you would invest 4,982 in Simplify Exchange Traded on August 29, 2024 and sell it today you would earn a total of 37.00 from holding Simplify Exchange Traded or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Liberty Treasury vs. Simplify Exchange Traded
Performance |
| Timeline |
| Franklin Liberty Treasury |
| Simplify Exchange Traded |
Franklin Liberty and Simplify Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Liberty and Simplify Exchange
The main advantage of trading using opposite Franklin Liberty and Simplify Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Liberty position performs unexpectedly, Simplify Exchange 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 Simplify Exchange will offset losses from the drop in Simplify Exchange'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 |
| Simplify Exchange vs. FlexShares Disciplined Duration | Simplify Exchange vs. Vanguard Mortgage Backed Securities | Simplify Exchange vs. WisdomTree Mortgage Plus | Simplify Exchange vs. iShares MBS ETF |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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