Correlation Between Franklin Liberty and Dimensional Global
Can any of the company-specific risk be diversified away by investing in both Franklin Liberty and Dimensional Global 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 Dimensional Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Liberty International and Dimensional Global Core, you can compare the effects of market volatilities on Franklin Liberty and Dimensional Global 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 Dimensional Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Liberty and Dimensional Global.
Diversification Opportunities for Franklin Liberty and Dimensional Global
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Dimensional is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Liberty International and Dimensional Global Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional Global Core 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 International are associated (or correlated) with Dimensional Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional Global Core has no effect on the direction of Franklin Liberty i.e., Franklin Liberty and Dimensional Global go up and down completely randomly.
Pair Corralation between Franklin Liberty and Dimensional Global
Given the investment horizon of 90 days Franklin Liberty International is expected to generate 0.96 times more return on investment than Dimensional Global. However, Franklin Liberty International is 1.04 times less risky than Dimensional Global. It trades about 0.06 of its potential returns per unit of risk. Dimensional Global Core is currently generating about 0.0 per unit of risk. If you would invest 2,072 in Franklin Liberty International on August 26, 2024 and sell it today you would earn a total of 6.00 from holding Franklin Liberty International or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Liberty International vs. Dimensional Global Core
Performance |
| Timeline |
| Franklin Liberty Int |
| Dimensional Global Core |
Franklin Liberty and Dimensional Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Liberty and Dimensional Global
The main advantage of trading using opposite Franklin Liberty and Dimensional Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Liberty position performs unexpectedly, Dimensional Global 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 Dimensional Global will offset losses from the drop in Dimensional Global's long position.| Franklin Liberty vs. Franklin Liberty High | Franklin Liberty vs. Franklin Liberty Senior | Franklin Liberty vs. Franklin Liberty Intermediate | Franklin Liberty vs. Franklin Liberty Short |
| Dimensional Global vs. Valued Advisers Trust | Dimensional Global vs. Columbia Diversified Fixed | Dimensional Global vs. Principal Exchange Traded Funds | Dimensional Global vs. Doubleline Etf Trust |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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