Correlation Between Franklin Liberty and Xtrackers
Can any of the company-specific risk be diversified away by investing in both Franklin Liberty and Xtrackers 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 Xtrackers 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 Xtrackers 0 1 Year, you can compare the effects of market volatilities on Franklin Liberty and Xtrackers 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 Xtrackers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Liberty and Xtrackers.
Diversification Opportunities for Franklin Liberty and Xtrackers
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Xtrackers is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Liberty Treasury and Xtrackers 0 1 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers 0 1 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 Xtrackers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers 0 1 has no effect on the direction of Franklin Liberty i.e., Franklin Liberty and Xtrackers go up and down completely randomly.
Pair Corralation between Franklin Liberty and Xtrackers
Given the investment horizon of 90 days Franklin Liberty Treasury is expected to under-perform the Xtrackers. In addition to that, Franklin Liberty is 14.45 times more volatile than Xtrackers 0 1 Year. It trades about -0.11 of its total potential returns per unit of risk. Xtrackers 0 1 Year is currently generating about 0.81 per unit of volatility. If you would invest 3,005 in Xtrackers 0 1 Year on August 24, 2024 and sell it today you would earn a total of 11.00 from holding Xtrackers 0 1 Year or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Liberty Treasury vs. Xtrackers 0 1 Year
Performance |
| Timeline |
| Franklin Liberty Treasury |
| Xtrackers 0 1 |
Franklin Liberty and Xtrackers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Liberty and Xtrackers
The main advantage of trading using opposite Franklin Liberty and Xtrackers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Liberty position performs unexpectedly, Xtrackers 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 Xtrackers will offset losses from the drop in Xtrackers' 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 |
| Xtrackers vs. Global X Funds | Xtrackers vs. US Treasury 12 | Xtrackers vs. Tidal Trust II | Xtrackers 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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