Correlation Between Franklin Templeton and Western Asset
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Western Asset 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 Western Asset 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 Western Asset Managed, you can compare the effects of market volatilities on Franklin Templeton and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Western Asset.
Diversification Opportunities for Franklin Templeton and Western Asset
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Western is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Smacs and Western Asset Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Managed 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Managed has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Western Asset go up and down completely randomly.
Pair Corralation between Franklin Templeton and Western Asset
Assuming the 90 days horizon Franklin Templeton Smacs is expected to generate 0.99 times more return on investment than Western Asset. However, Franklin Templeton Smacs is 1.01 times less risky than Western Asset. It trades about 0.19 of its potential returns per unit of risk. Western Asset Managed is currently generating about 0.17 per unit of risk. If you would invest 881.00 in Franklin Templeton Smacs on November 28, 2024 and sell it today you would earn a total of 8.00 from holding Franklin Templeton Smacs or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Templeton Smacs vs. Western Asset Managed
Performance |
| Timeline |
| Franklin Templeton Smacs |
| Western Asset Managed |
Franklin Templeton and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Western Asset
The main advantage of trading using opposite Franklin Templeton and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Franklin Templeton vs. Fznopx | Franklin Templeton vs. Wmcanx | Franklin Templeton vs. Iaadx | Franklin Templeton vs. Rational Dividend Capture |
| Western Asset vs. Franklin Mutual Beacon | Western Asset vs. Templeton Developing Markets | Western Asset vs. Franklin Mutual Global | Western Asset vs. Franklin Mutual Global |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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