Correlation Between Guidepath(r) Managed and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both Guidepath(r) Managed and Franklin Templeton 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 Guidepath(r) Managed and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidepath Managed Futures and Franklin Templeton Smacs, you can compare the effects of market volatilities on Guidepath(r) Managed and Franklin Templeton 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 Guidepath(r) Managed with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath(r) Managed and Franklin Templeton.
Diversification Opportunities for Guidepath(r) Managed and Franklin Templeton
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guidepath(r) and Franklin is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Managed Futures and Franklin Templeton Smacs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton Smacs and Guidepath(r) Managed 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 Guidepath Managed Futures are associated (or correlated) with Franklin Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Templeton Smacs has no effect on the direction of Guidepath(r) Managed i.e., Guidepath(r) Managed and Franklin Templeton go up and down completely randomly.
Pair Corralation between Guidepath(r) Managed and Franklin Templeton
Assuming the 90 days horizon Guidepath Managed Futures is expected to under-perform the Franklin Templeton. But the mutual fund apears to be less risky and, when comparing its historical volatility, Guidepath Managed Futures is 1.09 times less risky than Franklin Templeton. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Franklin Templeton Smacs is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 738.00 in Franklin Templeton Smacs on September 2, 2024 and sell it today you would earn a total of 148.00 from holding Franklin Templeton Smacs or generate 20.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidepath Managed Futures vs. Franklin Templeton Smacs
Performance |
| Timeline |
| Guidepath Managed Futures |
| Franklin Templeton Smacs |
Guidepath(r) Managed and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidepath(r) Managed and Franklin Templeton
The main advantage of trading using opposite Guidepath(r) Managed and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidepath(r) Managed position performs unexpectedly, Franklin Templeton 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 Templeton will offset losses from the drop in Franklin Templeton's long position.| Guidepath(r) Managed vs. Pimco Income Strategy | Guidepath(r) Managed vs. American Balanced Fund | Guidepath(r) Managed vs. Nuveen Real Asset | Guidepath(r) Managed vs. New Economy Fund |
| Franklin Templeton vs. Franklin Mutual Beacon | Franklin Templeton vs. Templeton Developing Markets | Franklin Templeton vs. Franklin Mutual Global | Franklin Templeton vs. Franklin Mutual Global |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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