Correlation Between Franklin Minnesota and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Franklin Minnesota and Templeton 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 Minnesota and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Minnesota Tax Free and Templeton Global Bond, you can compare the effects of market volatilities on Franklin Minnesota and Templeton 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 Minnesota with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Minnesota and Templeton Global.
Diversification Opportunities for Franklin Minnesota and Templeton Global
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Templeton is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Minnesota Tax Free and Templeton Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Bond and Franklin Minnesota 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 Minnesota Tax Free are associated (or correlated) with Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global Bond has no effect on the direction of Franklin Minnesota i.e., Franklin Minnesota and Templeton Global go up and down completely randomly.
Pair Corralation between Franklin Minnesota and Templeton Global
Assuming the 90 days horizon Franklin Minnesota Tax Free is expected to generate 0.55 times more return on investment than Templeton Global. However, Franklin Minnesota Tax Free is 1.82 times less risky than Templeton Global. It trades about 0.2 of its potential returns per unit of risk. Templeton Global Bond is currently generating about -0.04 per unit of risk. If you would invest 1,132 in Franklin Minnesota Tax Free on September 3, 2024 and sell it today you would earn a total of 16.00 from holding Franklin Minnesota Tax Free or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Minnesota Tax Free vs. Templeton Global Bond
Performance |
| Timeline |
| Franklin Minnesota Tax |
| Templeton Global Bond |
Franklin Minnesota and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Minnesota and Templeton Global
The main advantage of trading using opposite Franklin Minnesota and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Minnesota position performs unexpectedly, Templeton 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 Templeton Global will offset losses from the drop in Templeton Global's long position.| Franklin Minnesota vs. T Rowe Price | Franklin Minnesota vs. T Rowe Price | Franklin Minnesota vs. Jp Morgan Smartretirement | Franklin Minnesota vs. Virtus Dfa 2040 |
| Templeton Global vs. Dodge Cox Emerging | Templeton Global vs. Dodge Income Fund | Templeton Global vs. Hotchkis Wiley High | Templeton Global vs. T Rowe Price |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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