Correlation Between SPDR Barclays and Franklin Liberty
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays 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 SPDR Barclays and Franklin Liberty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Short and Franklin Liberty Ultra, you can compare the effects of market volatilities on SPDR Barclays 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 SPDR Barclays with a short position of Franklin Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Franklin Liberty.
Diversification Opportunities for SPDR Barclays and Franklin Liberty
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and Franklin is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Short and Franklin Liberty Ultra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty Ultra and SPDR Barclays 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 SPDR Barclays Short 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 Ultra has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Franklin Liberty go up and down completely randomly.
Pair Corralation between SPDR Barclays and Franklin Liberty
Given the investment horizon of 90 days SPDR Barclays Short is expected to generate 0.45 times more return on investment than Franklin Liberty. However, SPDR Barclays Short is 2.21 times less risky than Franklin Liberty. It trades about 0.33 of its potential returns per unit of risk. Franklin Liberty Ultra is currently generating about 0.13 per unit of risk. If you would invest 2,891 in SPDR Barclays Short on September 14, 2024 and sell it today you would earn a total of 14.00 from holding SPDR Barclays Short or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SPDR Barclays Short vs. Franklin Liberty Ultra
Performance |
| Timeline |
| SPDR Barclays Short |
| Franklin Liberty Ultra |
SPDR Barclays and Franklin Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and Franklin Liberty
The main advantage of trading using opposite SPDR Barclays and Franklin Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays 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.| SPDR Barclays vs. SPDR Barclays Long | SPDR Barclays vs. SPDR Portfolio Intermediate | SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. SPDR Barclays Intermediate |
| Franklin Liberty vs. iShares Treasury Floating | Franklin Liberty vs. SPDR Bloomberg Investment | Franklin Liberty vs. SPDR Barclays Short | Franklin Liberty vs. SPDR Bloomberg 1 3 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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