Correlation Between Franklin Libertyshares and Sancus Lending
Can any of the company-specific risk be diversified away by investing in both Franklin Libertyshares and Sancus Lending 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 Libertyshares and Sancus Lending into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Libertyshares ICAV and Sancus Lending Group, you can compare the effects of market volatilities on Franklin Libertyshares and Sancus Lending 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 Libertyshares with a short position of Sancus Lending. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Libertyshares and Sancus Lending.
Diversification Opportunities for Franklin Libertyshares and Sancus Lending
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Sancus is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Libertyshares ICAV and Sancus Lending Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sancus Lending Group and Franklin Libertyshares 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 Libertyshares ICAV are associated (or correlated) with Sancus Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sancus Lending Group has no effect on the direction of Franklin Libertyshares i.e., Franklin Libertyshares and Sancus Lending go up and down completely randomly.
Pair Corralation between Franklin Libertyshares and Sancus Lending
Assuming the 90 days trading horizon Franklin Libertyshares is expected to generate 6.81 times less return on investment than Sancus Lending. But when comparing it to its historical volatility, Franklin Libertyshares ICAV is 13.64 times less risky than Sancus Lending. It trades about 0.11 of its potential returns per unit of risk. Sancus Lending Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Sancus Lending Group on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Sancus Lending Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Franklin Libertyshares ICAV vs. Sancus Lending Group
Performance |
| Timeline |
| Franklin Libertyshares |
| Sancus Lending Group |
Franklin Libertyshares and Sancus Lending Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Libertyshares and Sancus Lending
The main advantage of trading using opposite Franklin Libertyshares and Sancus Lending positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Libertyshares position performs unexpectedly, Sancus Lending 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 Sancus Lending will offset losses from the drop in Sancus Lending's long position.| Franklin Libertyshares vs. Franklin LibertyQ Global | Franklin Libertyshares vs. Franklin Libertyshares ICAV | Franklin Libertyshares vs. Franklin FTSE Asia | Franklin Libertyshares vs. Franklin FTSE Brazil |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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