Correlation Between Templeton Foreign and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Templeton Foreign and Franklin Growth 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 Foreign and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Foreign Fund and Franklin Growth Opportunities, you can compare the effects of market volatilities on Templeton Foreign and Franklin Growth 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 Foreign with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Foreign and Franklin Growth.
Diversification Opportunities for Templeton Foreign and Franklin Growth
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and Franklin is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Foreign Fund and Franklin Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth Oppo and Templeton Foreign 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 Foreign Fund are associated (or correlated) with Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth Oppo has no effect on the direction of Templeton Foreign i.e., Templeton Foreign and Franklin Growth go up and down completely randomly.
Pair Corralation between Templeton Foreign and Franklin Growth
Assuming the 90 days horizon Templeton Foreign Fund is expected to under-perform the Franklin Growth. In addition to that, Templeton Foreign is 1.08 times more volatile than Franklin Growth Opportunities. It trades about -0.04 of its total potential returns per unit of risk. Franklin Growth Opportunities is currently generating about 0.29 per unit of volatility. If you would invest 5,210 in Franklin Growth Opportunities on September 1, 2024 and sell it today you would earn a total of 335.00 from holding Franklin Growth Opportunities or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Templeton Foreign Fund vs. Franklin Growth Opportunities
Performance |
| Timeline |
| Templeton Foreign |
| Franklin Growth Oppo |
Templeton Foreign and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Foreign and Franklin Growth
The main advantage of trading using opposite Templeton Foreign and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Foreign position performs unexpectedly, Franklin Growth 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 Growth will offset losses from the drop in Franklin Growth's long position.| Templeton Foreign vs. Deutsche Health And | Templeton Foreign vs. The Gabelli Healthcare | Templeton Foreign vs. Lord Abbett Health | Templeton Foreign vs. Eventide Healthcare Life |
| Franklin Growth vs. Blackrock Inflation Protected | Franklin Growth vs. Arrow Managed Futures | Franklin Growth vs. Western Asset Inflation | Franklin Growth vs. The Hartford Inflation |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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