Correlation Between SPDR Blackstone and Franklin Liberty
Can any of the company-specific risk be diversified away by investing in both SPDR Blackstone 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 Blackstone 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 Blackstone Senior and Franklin Liberty Senior, you can compare the effects of market volatilities on SPDR Blackstone 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 Blackstone with a short position of Franklin Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Blackstone and Franklin Liberty.
Diversification Opportunities for SPDR Blackstone and Franklin Liberty
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Franklin is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Blackstone Senior and Franklin Liberty Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty Senior and SPDR Blackstone 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 Blackstone Senior 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 Senior has no effect on the direction of SPDR Blackstone i.e., SPDR Blackstone and Franklin Liberty go up and down completely randomly.
Pair Corralation between SPDR Blackstone and Franklin Liberty
Given the investment horizon of 90 days SPDR Blackstone is expected to generate 1.14 times less return on investment than Franklin Liberty. But when comparing it to its historical volatility, SPDR Blackstone Senior is 1.26 times less risky than Franklin Liberty. It trades about 0.21 of its potential returns per unit of risk. Franklin Liberty Senior is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,987 in Franklin Liberty Senior on August 24, 2024 and sell it today you would earn a total of 452.00 from holding Franklin Liberty Senior or generate 22.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Blackstone Senior vs. Franklin Liberty Senior
Performance |
| Timeline |
| SPDR Blackstone Senior |
| Franklin Liberty Senior |
SPDR Blackstone and Franklin Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Blackstone and Franklin Liberty
The main advantage of trading using opposite SPDR Blackstone and Franklin Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Blackstone 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 Blackstone vs. Franklin Liberty Senior | SPDR Blackstone vs. Franklin Liberty Short | SPDR Blackstone vs. SPDR Bloomberg Investment | SPDR Blackstone vs. VanEck Investment Grade |
| Franklin Liberty vs. Franklin Liberty Short | Franklin Liberty vs. SPDR Bloomberg Investment | Franklin Liberty vs. VanEck Investment Grade |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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