Correlation Between Franklin Templeton and Blackrock Muni
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Blackrock Muni 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 Blackrock Muni 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 Blackrock Muni Intermediate, you can compare the effects of market volatilities on Franklin Templeton and Blackrock Muni 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 Blackrock Muni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Blackrock Muni.
Diversification Opportunities for Franklin Templeton and Blackrock Muni
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Blackrock is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Limited and Blackrock Muni Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muni Inter 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 Blackrock Muni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muni Inter has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Blackrock Muni go up and down completely randomly.
Pair Corralation between Franklin Templeton and Blackrock Muni
Considering the 90-day investment horizon Franklin Templeton Limited is expected to generate 1.09 times more return on investment than Blackrock Muni. However, Franklin Templeton is 1.09 times more volatile than Blackrock Muni Intermediate. It trades about 0.11 of its potential returns per unit of risk. Blackrock Muni Intermediate is currently generating about 0.08 per unit of risk. If you would invest 513.00 in Franklin Templeton Limited on August 31, 2024 and sell it today you would earn a total of 151.00 from holding Franklin Templeton Limited or generate 29.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton Limited vs. Blackrock Muni Intermediate
Performance |
| Timeline |
| Franklin Templeton |
| Blackrock Muni Inter |
Franklin Templeton and Blackrock Muni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Blackrock Muni
The main advantage of trading using opposite Franklin Templeton and Blackrock Muni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Blackrock Muni 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 Blackrock Muni will offset losses from the drop in Blackrock Muni's long position.| Franklin Templeton vs. MFS Investment Grade | Franklin Templeton vs. Invesco High Income | Franklin Templeton vs. Eaton Vance National | Franklin Templeton vs. Rivernorth Opportunistic Municipalome |
| Blackrock Muni vs. Blackrock Muniyield | Blackrock Muni vs. Blackrock Muniyield Quality | Blackrock Muni vs. Blackrock Muniyield Quality | Blackrock Muni vs. Blackrock Muniholdings Quality |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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