Correlation Between Franklin and Foreign Bond
Can any of the company-specific risk be diversified away by investing in both Franklin and Foreign Bond 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 Foreign Bond 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 Foreign Bond Fund, you can compare the effects of market volatilities on Franklin and Foreign Bond 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 Foreign Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Foreign Bond.
Diversification Opportunities for Franklin and Foreign Bond
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Foreign is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Foreign Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foreign Bond 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 Foreign Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foreign Bond has no effect on the direction of Franklin i.e., Franklin and Foreign Bond go up and down completely randomly.
Pair Corralation between Franklin and Foreign Bond
If you would invest 100.00 in Franklin Government Money on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Franklin Government Money or generate 0.0% 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. Foreign Bond Fund
Performance |
| Timeline |
| Franklin Government Money |
| Foreign Bond |
Franklin and Foreign Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin and Foreign Bond
The main advantage of trading using opposite Franklin and Foreign Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin position performs unexpectedly, Foreign Bond 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 Foreign Bond will offset losses from the drop in Foreign Bond's long position.| Franklin vs. Vanguard Total Stock | Franklin vs. Vanguard 500 Index | Franklin vs. Vanguard Total Stock | Franklin vs. Vanguard Total Stock |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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