Correlation Between Templeton Developing and Ftfa Franklin
Can any of the company-specific risk be diversified away by investing in both Templeton Developing and Ftfa Franklin 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 Templeton Developing and Ftfa Franklin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Developing Markets and Ftfa Franklin Templeton Growth, you can compare the effects of market volatilities on Templeton Developing and Ftfa Franklin 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 Templeton Developing with a short position of Ftfa Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Developing and Ftfa Franklin.
Diversification Opportunities for Templeton Developing and Ftfa Franklin
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Templeton and Ftfa is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Developing Markets and Ftfa Franklin Templeton Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ftfa Franklin Templeton and Templeton Developing 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 Templeton Developing Markets are associated (or correlated) with Ftfa Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ftfa Franklin Templeton has no effect on the direction of Templeton Developing i.e., Templeton Developing and Ftfa Franklin go up and down completely randomly.
Pair Corralation between Templeton Developing and Ftfa Franklin
Assuming the 90 days horizon Templeton Developing Markets is expected to under-perform the Ftfa Franklin. In addition to that, Templeton Developing is 1.56 times more volatile than Ftfa Franklin Templeton Growth. It trades about -0.05 of its total potential returns per unit of risk. Ftfa Franklin Templeton Growth is currently generating about 0.04 per unit of volatility. If you would invest 2,115 in Ftfa Franklin Templeton Growth on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Ftfa Franklin Templeton Growth or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Developing Markets vs. Ftfa Franklin Templeton Growth
Performance |
| Timeline |
| Templeton Developing |
| Ftfa Franklin Templeton |
Templeton Developing and Ftfa Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Developing and Ftfa Franklin
The main advantage of trading using opposite Templeton Developing and Ftfa Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Developing position performs unexpectedly, Ftfa Franklin 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 Ftfa Franklin will offset losses from the drop in Ftfa Franklin's long position.| Templeton Developing vs. Templeton Foreign Fund | Templeton Developing vs. Franklin Mutual Global | Templeton Developing vs. Templeton Growth Fund | Templeton Developing vs. Franklin Small Mid Cap |
| Ftfa Franklin vs. Income Fund Of | Ftfa Franklin vs. Income Fund Of | Ftfa Franklin vs. Income Fund Of | Ftfa Franklin vs. Income Fund Of |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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