Correlation Between Franklin Templeton and Litman Gregory
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Litman Gregory 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 Litman Gregory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton ETF and Litman Gregory Funds, you can compare the effects of market volatilities on Franklin Templeton and Litman Gregory 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 Litman Gregory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Litman Gregory.
Diversification Opportunities for Franklin Templeton and Litman Gregory
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Litman is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and Litman Gregory Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litman Gregory Funds 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 ETF are associated (or correlated) with Litman Gregory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litman Gregory Funds has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Litman Gregory go up and down completely randomly.
Pair Corralation between Franklin Templeton and Litman Gregory
Considering the 90-day investment horizon Franklin Templeton is expected to generate 24.73 times less return on investment than Litman Gregory. But when comparing it to its historical volatility, Franklin Templeton ETF is 38.95 times less risky than Litman Gregory. It trades about 0.09 of its potential returns per unit of risk. Litman Gregory Funds is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Litman Gregory Funds on September 5, 2024 and sell it today you would earn a total of 1,206 from holding Litman Gregory Funds or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 64.57% |
| Values | Daily Returns |
Franklin Templeton ETF vs. Litman Gregory Funds
Performance |
| Timeline |
| Franklin Templeton ETF |
| Litman Gregory Funds |
Franklin Templeton and Litman Gregory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Litman Gregory
The main advantage of trading using opposite Franklin Templeton and Litman Gregory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Litman Gregory 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 Litman Gregory will offset losses from the drop in Litman Gregory's long position.| Franklin Templeton vs. Vanguard Information Technology | Franklin Templeton vs. Technology Select Sector | Franklin Templeton vs. iShares Technology ETF | Franklin Templeton vs. VanEck Semiconductor ETF |
| Litman Gregory vs. Franklin Templeton ETF | Litman Gregory vs. TrueShares Technology AI | Litman Gregory vs. Franklin Exponential Data | Litman Gregory vs. Franklin Genomic Advancements |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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