Correlation Between Franklin Small and Templeton Foreign
Can any of the company-specific risk be diversified away by investing in both Franklin Small 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 Small 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 Small Mid Cap and Templeton Foreign Fund, you can compare the effects of market volatilities on Franklin Small 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 Small with a short position of Templeton Foreign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Small and Templeton Foreign.
Diversification Opportunities for Franklin Small and Templeton Foreign
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Templeton is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Small Mid Cap 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 Small 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 Small Mid Cap 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 Small i.e., Franklin Small and Templeton Foreign go up and down completely randomly.
Pair Corralation between Franklin Small and Templeton Foreign
Assuming the 90 days horizon Franklin Small Mid Cap is expected to generate 1.03 times more return on investment than Templeton Foreign. However, Franklin Small is 1.03 times more volatile than Templeton Foreign Fund. It trades about 0.08 of its potential returns per unit of risk. Templeton Foreign Fund is currently generating about 0.02 per unit of risk. If you would invest 3,233 in Franklin Small Mid Cap on September 26, 2024 and sell it today you would earn a total of 1,543 from holding Franklin Small Mid Cap or generate 47.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Small Mid Cap vs. Templeton Foreign Fund
Performance |
| Timeline |
| Franklin Small Mid |
| Templeton Foreign |
Franklin Small and Templeton Foreign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Small and Templeton Foreign
The main advantage of trading using opposite Franklin Small and Templeton Foreign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Small 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 Small vs. Templeton Foreign Fund | Franklin Small vs. Franklin Growth Fund | Franklin Small vs. Franklin Balance Sheet | Franklin Small vs. Templeton Developing Markets |
| Templeton Foreign vs. Franklin Small Mid Cap | Templeton Foreign vs. Blackrock Glbl Sm | Templeton Foreign vs. Blackrock Fundamental Growth | Templeton Foreign vs. Blackrock Gbl Alloc |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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