Correlation Between Franklin and Thornburg Limited
Can any of the company-specific risk be diversified away by investing in both Franklin and Thornburg Limited 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 Thornburg Limited 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 Thornburg Limited Term, you can compare the effects of market volatilities on Franklin and Thornburg Limited 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 Thornburg Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Thornburg Limited.
Diversification Opportunities for Franklin and Thornburg Limited
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Thornburg is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Thornburg Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Limited Term 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 Thornburg Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Limited Term has no effect on the direction of Franklin i.e., Franklin and Thornburg Limited go up and down completely randomly.
Pair Corralation between Franklin and Thornburg Limited
Assuming the 90 days horizon Franklin is expected to generate 1.57 times less return on investment than Thornburg Limited. But when comparing it to its historical volatility, Franklin Government Money is 1.69 times less risky than Thornburg Limited. It trades about 0.13 of its potential returns per unit of risk. Thornburg Limited Term is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,158 in Thornburg Limited Term on August 29, 2024 and sell it today you would earn a total of 37.00 from holding Thornburg Limited Term or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Thornburg Limited Term
Performance |
| Timeline |
| Franklin Government Money |
| Thornburg Limited Term |
Franklin and Thornburg Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin and Thornburg Limited
The main advantage of trading using opposite Franklin and Thornburg Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin position performs unexpectedly, Thornburg Limited 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 Thornburg Limited will offset losses from the drop in Thornburg Limited's long position.| Franklin vs. Franklin Mutual Beacon | Franklin vs. Franklin Mutual Global | Franklin vs. Franklin Mutual Global | Franklin vs. Franklin Mutual Global |
| Thornburg Limited vs. Bbh Intermediate Municipal | Thornburg Limited vs. Icon Bond Fund | Thornburg Limited vs. Maryland Tax Free Bond | Thornburg Limited vs. Multisector Bond Sma |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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