Correlation Between Franklin Balance and Templeton Foreign
Can any of the company-specific risk be diversified away by investing in both Franklin Balance and Templeton Foreign 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 Balance and Templeton Foreign into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Balance Sheet and Templeton Foreign Fund, you can compare the effects of market volatilities on Franklin Balance and Templeton Foreign 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 Balance with a short position of Templeton Foreign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Balance and Templeton Foreign.
Diversification Opportunities for Franklin Balance and Templeton Foreign
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Templeton is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Balance Sheet and Templeton Foreign Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Foreign and Franklin Balance 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 Balance Sheet are associated (or correlated) with Templeton Foreign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Foreign has no effect on the direction of Franklin Balance i.e., Franklin Balance and Templeton Foreign go up and down completely randomly.
Pair Corralation between Franklin Balance and Templeton Foreign
Assuming the 90 days horizon Franklin Balance Sheet is expected to generate 0.93 times more return on investment than Templeton Foreign. However, Franklin Balance Sheet is 1.08 times less risky than Templeton Foreign. It trades about 0.25 of its potential returns per unit of risk. Templeton Foreign Fund is currently generating about -0.18 per unit of risk. If you would invest 3,793 in Franklin Balance Sheet on August 29, 2024 and sell it today you would earn a total of 215.00 from holding Franklin Balance Sheet or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Balance Sheet vs. Templeton Foreign Fund
Performance |
| Timeline |
| Franklin Balance Sheet |
| Templeton Foreign |
Franklin Balance and Templeton Foreign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Balance and Templeton Foreign
The main advantage of trading using opposite Franklin Balance and Templeton Foreign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Balance position performs unexpectedly, Templeton Foreign 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 Foreign will offset losses from the drop in Templeton Foreign's long position.| Franklin Balance vs. Vanguard Mid Cap Value | Franklin Balance vs. HUMANA INC | Franklin Balance vs. Aquagold International | Franklin Balance vs. Barloworld Ltd ADR |
| Templeton Foreign vs. Ab Value Fund | Templeton Foreign vs. Barings Active Short | Templeton Foreign vs. Qs Growth Fund | Templeton Foreign vs. Nasdaq 100 Index Fund |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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