Correlation Between Franklin Templeton and Western Asset
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Western Asset 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 Templeton and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton Limited and Western Asset Investment, you can compare the effects of market volatilities on Franklin Templeton and Western Asset 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 Templeton with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Western Asset.
Diversification Opportunities for Franklin Templeton and Western Asset
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Western is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Limited and Western Asset Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Investment and Franklin Templeton 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 Templeton Limited are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Investment has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Western Asset go up and down completely randomly.
Pair Corralation between Franklin Templeton and Western Asset
Considering the 90-day investment horizon Franklin Templeton Limited is expected to under-perform the Western Asset. In addition to that, Franklin Templeton is 1.2 times more volatile than Western Asset Investment. It trades about -0.19 of its total potential returns per unit of risk. Western Asset Investment is currently generating about -0.15 per unit of volatility. If you would invest 1,678 in Western Asset Investment on December 24, 2024 and sell it today you would lose (21.00) from holding Western Asset Investment or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton Limited vs. Western Asset Investment
Performance |
| Timeline |
| Franklin Templeton |
| Western Asset Investment |
Franklin Templeton and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Western Asset
The main advantage of trading using opposite Franklin Templeton and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Franklin Templeton vs. MFS Investment Grade | Franklin Templeton vs. Eaton Vance National | Franklin Templeton vs. Rivernorth Opportunistic Municipalome | Franklin Templeton vs. RiverNorth Managed Duration |
| Western Asset vs. Pioneer Floating Rate | Western Asset vs. The Gabelli Equity | Western Asset vs. Pioneer Municipal High | Western Asset vs. Nuveen Global High |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |