Correlation Between Franklin Liberty and US Treasury
Can any of the company-specific risk be diversified away by investing in both Franklin Liberty and US Treasury 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 US Treasury 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 US Treasury 12, you can compare the effects of market volatilities on Franklin Liberty and US Treasury 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 US Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Liberty and US Treasury.
Diversification Opportunities for Franklin Liberty and US Treasury
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and OBIL is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Liberty Treasury and US Treasury 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Treasury 12 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 US Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Treasury 12 has no effect on the direction of Franklin Liberty i.e., Franklin Liberty and US Treasury go up and down completely randomly.
Pair Corralation between Franklin Liberty and US Treasury
Given the investment horizon of 90 days Franklin Liberty Treasury is expected to generate 8.02 times more return on investment than US Treasury. However, Franklin Liberty is 8.02 times more volatile than US Treasury 12. It trades about 0.08 of its potential returns per unit of risk. US Treasury 12 is currently generating about 0.52 per unit of risk. If you would invest 2,014 in Franklin Liberty Treasury on September 18, 2024 and sell it today you would earn a total of 10.00 from holding Franklin Liberty Treasury or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Liberty Treasury vs. US Treasury 12
Performance |
| Timeline |
| Franklin Liberty Treasury |
| US Treasury 12 |
Franklin Liberty and US Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Liberty and US Treasury
The main advantage of trading using opposite Franklin Liberty and US Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Liberty position performs unexpectedly, US Treasury 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 US Treasury will offset losses from the drop in US Treasury's long position.| Franklin Liberty vs. Bondbloxx ETF Trust | Franklin Liberty vs. Bondbloxx ETF Trust | Franklin Liberty vs. Bondbloxx ETF Trust | Franklin Liberty vs. Bondbloxx ETF Trust |
| US Treasury vs. Vanguard Intermediate Term Treasury | US Treasury vs. Vanguard Long Term Treasury | US Treasury vs. Vanguard Short Term Corporate | US Treasury vs. Vanguard Short Term Inflation Protected |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stocks Directory Find actively traded stocks across global markets |