Correlation Between US Treasury and Franklin Liberty
Can any of the company-specific risk be diversified away by investing in both US Treasury and Franklin Liberty 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 US Treasury and Franklin Liberty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Treasury 12 and Franklin Liberty Treasury, you can compare the effects of market volatilities on US Treasury and Franklin Liberty 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 US Treasury with a short position of Franklin Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Treasury and Franklin Liberty.
Diversification Opportunities for US Treasury and Franklin Liberty
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OBIL and Franklin is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding US Treasury 12 and Franklin Liberty Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty Treasury and US Treasury 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 US Treasury 12 are associated (or correlated) with Franklin Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Liberty Treasury has no effect on the direction of US Treasury i.e., US Treasury and Franklin Liberty go up and down completely randomly.
Pair Corralation between US Treasury and Franklin Liberty
Given the investment horizon of 90 days US Treasury 12 is expected to generate 0.16 times more return on investment than Franklin Liberty. However, US Treasury 12 is 6.19 times less risky than Franklin Liberty. It trades about 0.3 of its potential returns per unit of risk. Franklin Liberty Treasury is currently generating about 0.02 per unit of risk. If you would invest 4,569 in US Treasury 12 on August 25, 2024 and sell it today you would earn a total of 435.00 from holding US Treasury 12 or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Treasury 12 vs. Franklin Liberty Treasury
Performance |
| Timeline |
| US Treasury 12 |
| Franklin Liberty Treasury |
US Treasury and Franklin Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Treasury and Franklin Liberty
The main advantage of trading using opposite US Treasury and Franklin Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Treasury position performs unexpectedly, Franklin Liberty 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 Liberty will offset losses from the drop in Franklin Liberty's long position.| US Treasury vs. SPDR Barclays Short | US Treasury vs. iShares Agency Bond | US Treasury vs. Rbb Fund | US Treasury vs. Bondbloxx ETF Trust |
| Franklin Liberty vs. Franklin Templeton ETF | Franklin Liberty vs. Franklin Liberty Investment | Franklin Liberty vs. Franklin Liberty International | Franklin Liberty vs. Franklin Liberty Intermediate |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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