Correlation Between Templeton Foreign and Franklin Efolio
Can any of the company-specific risk be diversified away by investing in both Templeton Foreign and Franklin Efolio 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 Efolio 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 Efolio Allocation, you can compare the effects of market volatilities on Templeton Foreign and Franklin Efolio 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 Efolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Foreign and Franklin Efolio.
Diversification Opportunities for Templeton Foreign and Franklin Efolio
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and Franklin is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Foreign Fund and Franklin Efolio Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Efolio Allo 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 Efolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Efolio Allo has no effect on the direction of Templeton Foreign i.e., Templeton Foreign and Franklin Efolio go up and down completely randomly.
Pair Corralation between Templeton Foreign and Franklin Efolio
Assuming the 90 days horizon Templeton Foreign Fund is expected to under-perform the Franklin Efolio. In addition to that, Templeton Foreign is 1.48 times more volatile than Franklin Efolio Allocation. It trades about -0.03 of its total potential returns per unit of risk. Franklin Efolio Allocation is currently generating about -0.01 per unit of volatility. If you would invest 2,465 in Franklin Efolio Allocation on September 12, 2024 and sell it today you would lose (5.00) from holding Franklin Efolio Allocation or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Templeton Foreign Fund vs. Franklin Efolio Allocation
Performance |
| Timeline |
| Templeton Foreign |
| Franklin Efolio Allo |
Templeton Foreign and Franklin Efolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Foreign and Franklin Efolio
The main advantage of trading using opposite Templeton Foreign and Franklin Efolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Foreign position performs unexpectedly, Franklin Efolio 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 Efolio will offset losses from the drop in Franklin Efolio's long position.| Templeton Foreign vs. Oakmark International Fund | Templeton Foreign vs. Dodge International Stock | Templeton Foreign vs. Oakmark International Fund | Templeton Foreign vs. Oakmark International Fund |
| Franklin Efolio vs. Lord Abbett Affiliated | Franklin Efolio vs. Qs Large Cap | Franklin Efolio vs. American Mutual Fund | Franklin Efolio vs. Avantis Large Cap |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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