Correlation Between Franklin Liberty and SPDR Blackstone
Can any of the company-specific risk be diversified away by investing in both Franklin Liberty and SPDR Blackstone 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 Blackstone 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 Blackstone Senior, you can compare the effects of market volatilities on Franklin Liberty and SPDR Blackstone 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 Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Liberty and SPDR Blackstone.
Diversification Opportunities for Franklin Liberty and SPDR Blackstone
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and SPDR is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Liberty Short and SPDR Blackstone Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Blackstone Senior 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 Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Blackstone Senior has no effect on the direction of Franklin Liberty i.e., Franklin Liberty and SPDR Blackstone go up and down completely randomly.
Pair Corralation between Franklin Liberty and SPDR Blackstone
Given the investment horizon of 90 days Franklin Liberty is expected to generate 1.96 times less return on investment than SPDR Blackstone. But when comparing it to its historical volatility, Franklin Liberty Short is 1.53 times less risky than SPDR Blackstone. It trades about 0.17 of its potential returns per unit of risk. SPDR Blackstone Senior is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3,480 in SPDR Blackstone Senior on August 28, 2024 and sell it today you would earn a total of 715.00 from holding SPDR Blackstone Senior or generate 20.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Liberty Short vs. SPDR Blackstone Senior
Performance |
| Timeline |
| Franklin Liberty Short |
| SPDR Blackstone Senior |
Franklin Liberty and SPDR Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Liberty and SPDR Blackstone
The main advantage of trading using opposite Franklin Liberty and SPDR Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Liberty position performs unexpectedly, SPDR Blackstone 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 Blackstone will offset losses from the drop in SPDR Blackstone'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 Blackstone vs. Invesco Senior Loan | SPDR Blackstone vs. First Trust Senior | SPDR Blackstone vs. SPDR Bloomberg Short | SPDR Blackstone vs. SPDR Bloomberg Investment |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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