Correlation Between Franklin Templeton and Locorr Longshort
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Locorr Longshort 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 Locorr Longshort 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 Locorr Longshort Modities, you can compare the effects of market volatilities on Franklin Templeton and Locorr Longshort 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 Locorr Longshort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Locorr Longshort.
Diversification Opportunities for Franklin Templeton and Locorr Longshort
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Locorr is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Smacs and Locorr Longshort Modities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Longshort Modities 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 Locorr Longshort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Longshort Modities has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Locorr Longshort go up and down completely randomly.
Pair Corralation between Franklin Templeton and Locorr Longshort
Assuming the 90 days horizon Franklin Templeton Smacs is expected to generate 1.13 times more return on investment than Locorr Longshort. However, Franklin Templeton is 1.13 times more volatile than Locorr Longshort Modities. It trades about 0.08 of its potential returns per unit of risk. Locorr Longshort Modities is currently generating about -0.05 per unit of risk. If you would invest 796.00 in Franklin Templeton Smacs on September 3, 2024 and sell it today you would earn a total of 103.00 from holding Franklin Templeton Smacs or generate 12.94% 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. Locorr Longshort Modities
Performance |
| Timeline |
| Franklin Templeton Smacs |
| Locorr Longshort Modities |
Franklin Templeton and Locorr Longshort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Locorr Longshort
The main advantage of trading using opposite Franklin Templeton and Locorr Longshort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Locorr Longshort 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 Locorr Longshort will offset losses from the drop in Locorr Longshort'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 |
| Locorr Longshort vs. First American Funds | Locorr Longshort vs. Matson Money Equity | Locorr Longshort vs. Lord Abbett Emerging | Locorr Longshort vs. Janus Investment |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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