Correlation Between Franklin Templeton and Franklin High
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Franklin High 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 Templeton and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton Smacs and Franklin High Income, you can compare the effects of market volatilities on Franklin Templeton and Franklin High 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 Templeton with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Franklin High.
Diversification Opportunities for Franklin Templeton and Franklin High
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Franklin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Smacs and Franklin High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Income and Franklin Templeton 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 Templeton Smacs are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Income has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Franklin High go up and down completely randomly.
Pair Corralation between Franklin Templeton and Franklin High
Assuming the 90 days horizon Franklin Templeton Smacs is expected to generate 0.96 times more return on investment than Franklin High. However, Franklin Templeton Smacs is 1.04 times less risky than Franklin High. It trades about 0.15 of its potential returns per unit of risk. Franklin High Income is currently generating about 0.14 per unit of risk. If you would invest 808.00 in Franklin Templeton Smacs on September 3, 2024 and sell it today you would earn a total of 91.00 from holding Franklin Templeton Smacs or generate 11.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton Smacs vs. Franklin High Income
Performance |
| Timeline |
| Franklin Templeton Smacs |
| Franklin High Income |
Franklin Templeton and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Franklin High
The main advantage of trading using opposite Franklin Templeton and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Franklin High 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 High will offset losses from the drop in Franklin High's long position.| Franklin Templeton vs. Locorr Longshort Modities | Franklin Templeton vs. Ab Select Longshort | Franklin Templeton vs. Limited Term Tax | Franklin Templeton vs. Calvert Short Duration |
| Franklin High vs. Guggenheim High Yield | Franklin High vs. American Century High | Franklin High vs. Calvert High Yield | Franklin High vs. Virtus High Yield |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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