Correlation Between Franklin Liberty and SPDR Bloomberg
Can any of the company-specific risk be diversified away by investing in both Franklin Liberty and SPDR Bloomberg 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 Liberty and SPDR Bloomberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Liberty Short and SPDR Bloomberg 1 3, you can compare the effects of market volatilities on Franklin Liberty and SPDR Bloomberg 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 Liberty with a short position of SPDR Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Liberty and SPDR Bloomberg.
Diversification Opportunities for Franklin Liberty and SPDR Bloomberg
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and SPDR is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Liberty Short and SPDR Bloomberg 1 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg 1 and Franklin Liberty 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 Liberty Short are associated (or correlated) with SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg 1 has no effect on the direction of Franklin Liberty i.e., Franklin Liberty and SPDR Bloomberg go up and down completely randomly.
Pair Corralation between Franklin Liberty and SPDR Bloomberg
Given the investment horizon of 90 days Franklin Liberty Short is expected to generate 8.23 times more return on investment than SPDR Bloomberg. However, Franklin Liberty is 8.23 times more volatile than SPDR Bloomberg 1 3. It trades about 0.2 of its potential returns per unit of risk. SPDR Bloomberg 1 3 is currently generating about 1.09 per unit of risk. If you would invest 9,026 in Franklin Liberty Short on November 1, 2024 and sell it today you would earn a total of 43.00 from holding Franklin Liberty Short or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Liberty Short vs. SPDR Bloomberg 1 3
Performance |
| Timeline |
| Franklin Liberty Short |
| SPDR Bloomberg 1 |
Franklin Liberty and SPDR Bloomberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Liberty and SPDR Bloomberg
The main advantage of trading using opposite Franklin Liberty and SPDR Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Liberty position performs unexpectedly, SPDR Bloomberg 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 SPDR Bloomberg will offset losses from the drop in SPDR Bloomberg's long position.| Franklin Liberty vs. FlexShares Ready Access | Franklin Liberty vs. Franklin Liberty Investment | Franklin Liberty vs. PIMCO Enhanced Low | Franklin Liberty vs. SPDR SSgA Ultra |
| SPDR Bloomberg vs. Global X Funds | SPDR Bloomberg vs. US Treasury 12 | SPDR Bloomberg vs. Tidal Trust II | SPDR Bloomberg vs. Franklin Liberty Treasury |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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