Correlation Between Franklin Liberty and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both Franklin Liberty and Franklin Templeton 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 Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Liberty Intermediate and Franklin Templeton ETF, you can compare the effects of market volatilities on Franklin Liberty and Franklin Templeton 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 Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Liberty and Franklin Templeton.
Diversification Opportunities for Franklin Liberty and Franklin Templeton
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Franklin is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Liberty Intermediate and Franklin Templeton ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton ETF 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 Intermediate are associated (or correlated) with Franklin Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Templeton ETF has no effect on the direction of Franklin Liberty i.e., Franklin Liberty and Franklin Templeton go up and down completely randomly.
Pair Corralation between Franklin Liberty and Franklin Templeton
Given the investment horizon of 90 days Franklin Liberty Intermediate is expected to generate 1.18 times more return on investment than Franklin Templeton. However, Franklin Liberty is 1.18 times more volatile than Franklin Templeton ETF. It trades about 0.13 of its potential returns per unit of risk. Franklin Templeton ETF is currently generating about -0.1 per unit of risk. If you would invest 2,449 in Franklin Liberty Intermediate on August 24, 2024 and sell it today you would earn a total of 28.00 from holding Franklin Liberty Intermediate or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Liberty Intermediate vs. Franklin Templeton ETF
Performance |
| Timeline |
| Franklin Liberty Int |
| Franklin Templeton ETF |
Franklin Liberty and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Liberty and Franklin Templeton
The main advantage of trading using opposite Franklin Liberty and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Liberty position performs unexpectedly, Franklin Templeton 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 Franklin Templeton will offset losses from the drop in Franklin Templeton's long position.| Franklin Liberty vs. Franklin Liberty Federal | Franklin Liberty vs. Hartford Municipal Opportunities | Franklin Liberty vs. IQ MacKay Municipal | Franklin Liberty vs. First Trust Municipal |
| Franklin Templeton vs. Franklin Liberty Investment | Franklin Templeton vs. iShares ESG Aggregate | Franklin Templeton vs. Franklin LibertyQ Equity | Franklin Templeton vs. Franklin Liberty Short |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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