Correlation Between Franklin LibertyQ and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both Franklin LibertyQ 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 LibertyQ 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 LibertyQ Equity and Franklin Templeton ETF, you can compare the effects of market volatilities on Franklin LibertyQ 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 LibertyQ with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin LibertyQ and Franklin Templeton.
Diversification Opportunities for Franklin LibertyQ and Franklin Templeton
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Franklin is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Franklin LibertyQ Equity 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 LibertyQ 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 LibertyQ Equity 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 LibertyQ i.e., Franklin LibertyQ and Franklin Templeton go up and down completely randomly.
Pair Corralation between Franklin LibertyQ and Franklin Templeton
Given the investment horizon of 90 days Franklin LibertyQ Equity is expected to generate 2.05 times more return on investment than Franklin Templeton. However, Franklin LibertyQ is 2.05 times more volatile than Franklin Templeton ETF. It trades about 0.1 of its potential returns per unit of risk. Franklin Templeton ETF is currently generating about 0.03 per unit of risk. If you would invest 3,994 in Franklin LibertyQ Equity on August 24, 2024 and sell it today you would earn a total of 1,991 from holding Franklin LibertyQ Equity or generate 49.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin LibertyQ Equity vs. Franklin Templeton ETF
Performance |
| Timeline |
| Franklin LibertyQ Equity |
| Franklin Templeton ETF |
Franklin LibertyQ and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin LibertyQ and Franklin Templeton
The main advantage of trading using opposite Franklin LibertyQ and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin LibertyQ 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 LibertyQ vs. Morningstar Unconstrained Allocation | Franklin LibertyQ vs. High Yield Municipal Fund | Franklin LibertyQ vs. Via Renewables | Franklin LibertyQ vs. Knife River |
| 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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