Correlation Between Franklin Templeton and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Franklin Growth 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 Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton Multi Asset and Franklin Growth Fund, you can compare the effects of market volatilities on Franklin Templeton and Franklin Growth 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 Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Franklin Growth.
Diversification Opportunities for Franklin Templeton and Franklin Growth
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and FRANKLIN is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Multi Asset and Franklin Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth 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 Multi Asset are associated (or correlated) with Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Franklin Growth go up and down completely randomly.
Pair Corralation between Franklin Templeton and Franklin Growth
Assuming the 90 days horizon Franklin Templeton is expected to generate 2.22 times less return on investment than Franklin Growth. But when comparing it to its historical volatility, Franklin Templeton Multi Asset is 5.06 times less risky than Franklin Growth. It trades about 0.17 of its potential returns per unit of risk. Franklin Growth Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 11,319 in Franklin Growth Fund on September 3, 2024 and sell it today you would earn a total of 1,239 from holding Franklin Growth Fund or generate 10.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton Multi Asset vs. Franklin Growth Fund
Performance |
| Timeline |
| Franklin Templeton |
| Franklin Growth |
Franklin Templeton and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Franklin Growth
The main advantage of trading using opposite Franklin Templeton and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Franklin Growth 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 Franklin Growth will offset losses from the drop in Franklin Growth's long position.| Franklin Templeton vs. Deutsche Real Estate | Franklin Templeton vs. Goldman Sachs Real | Franklin Templeton vs. Columbia Real Estate | Franklin Templeton vs. Fidelity Real Estate |
| Franklin Growth vs. Fidelity Advisor Financial | Franklin Growth vs. Prudential Financial Services | Franklin Growth vs. Financials Ultrasector Profund | Franklin Growth vs. Gabelli Global Financial |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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