Correlation Between Franklin and Clearbridge International
Can any of the company-specific risk be diversified away by investing in both Franklin and Clearbridge International 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 and Clearbridge International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Government Money and Clearbridge International Value, you can compare the effects of market volatilities on Franklin and Clearbridge International 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 with a short position of Clearbridge International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Clearbridge International.
Diversification Opportunities for Franklin and Clearbridge International
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Clearbridge is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Clearbridge International Valu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge International and Franklin 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 Government Money are associated (or correlated) with Clearbridge International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge International has no effect on the direction of Franklin i.e., Franklin and Clearbridge International go up and down completely randomly.
Pair Corralation between Franklin and Clearbridge International
Assuming the 90 days horizon Franklin Government Money is expected to generate 0.14 times more return on investment than Clearbridge International. However, Franklin Government Money is 7.08 times less risky than Clearbridge International. It trades about 0.13 of its potential returns per unit of risk. Clearbridge International Value is currently generating about -0.06 per unit of risk. If you would invest 99.00 in Franklin Government Money on September 2, 2024 and sell it today you would earn a total of 1.00 from holding Franklin Government Money or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Clearbridge International Valu
Performance |
| Timeline |
| Franklin Government Money |
| Clearbridge International |
Franklin and Clearbridge International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin and Clearbridge International
The main advantage of trading using opposite Franklin and Clearbridge International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin position performs unexpectedly, Clearbridge International 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 Clearbridge International will offset losses from the drop in Clearbridge International's long position.| Franklin vs. Vanguard Total Stock | Franklin vs. Vanguard 500 Index | Franklin vs. Vanguard Total Stock | Franklin vs. Vanguard Total Stock |
| Clearbridge International vs. Kinetics Small Cap | Clearbridge International vs. Jpmorgan Small Cap | Clearbridge International vs. Vanguard Small Cap Growth | Clearbridge International vs. Fisher Small Cap |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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