Correlation Between Templeton Developing and Franklin Real
Can any of the company-specific risk be diversified away by investing in both Templeton Developing and Franklin Real 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 Real 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 Real Estate, you can compare the effects of market volatilities on Templeton Developing and Franklin Real 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 Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Developing and Franklin Real.
Diversification Opportunities for Templeton Developing and Franklin Real
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Templeton and Franklin is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Developing Markets and Franklin Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Real Estate 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 Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Real Estate has no effect on the direction of Templeton Developing i.e., Templeton Developing and Franklin Real go up and down completely randomly.
Pair Corralation between Templeton Developing and Franklin Real
Assuming the 90 days horizon Templeton Developing Markets is expected to under-perform the Franklin Real. But the mutual fund apears to be less risky and, when comparing its historical volatility, Templeton Developing Markets is 1.05 times less risky than Franklin Real. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Franklin Real Estate is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,960 in Franklin Real Estate on August 29, 2024 and sell it today you would earn a total of 25.00 from holding Franklin Real Estate or generate 1.28% 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. Franklin Real Estate
Performance |
| Timeline |
| Templeton Developing |
| Franklin Real Estate |
Templeton Developing and Franklin Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Developing and Franklin Real
The main advantage of trading using opposite Templeton Developing and Franklin Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Developing position performs unexpectedly, Franklin Real 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 Real will offset losses from the drop in Franklin Real's long position.| Templeton Developing vs. Templeton Foreign Fund | Templeton Developing vs. Franklin Mutual Global | Templeton Developing vs. Franklin Small Mid Cap | Templeton Developing vs. Franklin Real Estate |
| Franklin Real vs. Realty Income | Franklin Real vs. Dynex Capital | Franklin Real vs. First Industrial Realty | Franklin Real vs. Healthcare Realty Trust |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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