Correlation Between Templeton Developing and Franklin Maryland
Can any of the company-specific risk be diversified away by investing in both Templeton Developing and Franklin Maryland 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 Franklin Maryland 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 Franklin Maryland Tax Free, you can compare the effects of market volatilities on Templeton Developing and Franklin Maryland 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 Franklin Maryland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Developing and Franklin Maryland.
Diversification Opportunities for Templeton Developing and Franklin Maryland
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Templeton and Franklin is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Developing Markets and Franklin Maryland Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Maryland Tax 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 Franklin Maryland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Maryland Tax has no effect on the direction of Templeton Developing i.e., Templeton Developing and Franklin Maryland go up and down completely randomly.
Pair Corralation between Templeton Developing and Franklin Maryland
Assuming the 90 days horizon Templeton Developing Markets is expected to generate 3.85 times more return on investment than Franklin Maryland. However, Templeton Developing is 3.85 times more volatile than Franklin Maryland Tax Free. It trades about 0.21 of its potential returns per unit of risk. Franklin Maryland Tax Free is currently generating about -0.06 per unit of risk. If you would invest 1,875 in Templeton Developing Markets on November 2, 2024 and sell it today you would earn a total of 71.00 from holding Templeton Developing Markets or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Templeton Developing Markets vs. Franklin Maryland Tax Free
Performance |
| Timeline |
| Templeton Developing |
| Franklin Maryland Tax |
Templeton Developing and Franklin Maryland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Developing and Franklin Maryland
The main advantage of trading using opposite Templeton Developing and Franklin Maryland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Developing position performs unexpectedly, Franklin Maryland 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 Maryland will offset losses from the drop in Franklin Maryland'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 |
| Franklin Maryland vs. Oppenheimer Gold Special | Franklin Maryland vs. Goldman Sachs Strategic | Franklin Maryland vs. The Gold Bullion | Franklin Maryland vs. Wells Fargo Advantage |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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