Correlation Between SPDR Bloomberg and Franklin Liberty
Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg and Franklin Liberty 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 SPDR Bloomberg and Franklin Liberty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Bloomberg Investment and Franklin Liberty Ultra, you can compare the effects of market volatilities on SPDR Bloomberg and Franklin Liberty 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 SPDR Bloomberg with a short position of Franklin Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and Franklin Liberty.
Diversification Opportunities for SPDR Bloomberg and Franklin Liberty
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Franklin is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg Investment and Franklin Liberty Ultra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty Ultra and SPDR Bloomberg 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 SPDR Bloomberg Investment are associated (or correlated) with Franklin Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Liberty Ultra has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and Franklin Liberty go up and down completely randomly.
Pair Corralation between SPDR Bloomberg and Franklin Liberty
Given the investment horizon of 90 days SPDR Bloomberg is expected to generate 1.28 times less return on investment than Franklin Liberty. But when comparing it to its historical volatility, SPDR Bloomberg Investment is 3.63 times less risky than Franklin Liberty. It trades about 0.42 of its potential returns per unit of risk. Franklin Liberty Ultra is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,480 in Franklin Liberty Ultra on September 1, 2024 and sell it today you would earn a total of 13.00 from holding Franklin Liberty Ultra or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
SPDR Bloomberg Investment vs. Franklin Liberty Ultra
Performance |
| Timeline |
| SPDR Bloomberg Investment |
| Franklin Liberty Ultra |
SPDR Bloomberg and Franklin Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Bloomberg and Franklin Liberty
The main advantage of trading using opposite SPDR Bloomberg and Franklin Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg position performs unexpectedly, Franklin Liberty 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 Liberty will offset losses from the drop in Franklin Liberty's long position.| SPDR Bloomberg vs. iShares Floating Rate | SPDR Bloomberg vs. VanEck Investment Grade | SPDR Bloomberg vs. SPDR Blackstone Senior | SPDR Bloomberg vs. Invesco Ultra Short |
| Franklin Liberty vs. Valued Advisers Trust | Franklin Liberty vs. Columbia Diversified Fixed | Franklin Liberty vs. Principal Exchange Traded Funds | Franklin Liberty 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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