Correlation Between Templeton Global and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Templeton Global and Franklin Lifesmart 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 Global and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Global Bond and Franklin Lifesmart 2060, you can compare the effects of market volatilities on Templeton Global and Franklin Lifesmart 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 Global with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and Franklin Lifesmart.
Diversification Opportunities for Templeton Global and Franklin Lifesmart
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and Franklin is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Bond and Franklin Lifesmart 2060 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart 2060 and Templeton Global 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 Global Bond are associated (or correlated) with Franklin Lifesmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Lifesmart 2060 has no effect on the direction of Templeton Global i.e., Templeton Global and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Templeton Global and Franklin Lifesmart
Assuming the 90 days horizon Templeton Global Bond is expected to under-perform the Franklin Lifesmart. In addition to that, Templeton Global is 1.05 times more volatile than Franklin Lifesmart 2060. It trades about -0.08 of its total potential returns per unit of risk. Franklin Lifesmart 2060 is currently generating about 0.05 per unit of volatility. If you would invest 1,211 in Franklin Lifesmart 2060 on August 30, 2024 and sell it today you would earn a total of 8.00 from holding Franklin Lifesmart 2060 or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Global Bond vs. Franklin Lifesmart 2060
Performance |
| Timeline |
| Templeton Global Bond |
| Franklin Lifesmart 2060 |
Templeton Global and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Global and Franklin Lifesmart
The main advantage of trading using opposite Templeton Global and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Global position performs unexpectedly, Franklin Lifesmart 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 Lifesmart will offset losses from the drop in Franklin Lifesmart's long position.| Templeton Global vs. Gamco Global Telecommunications | Templeton Global vs. T Rowe Price | Templeton Global vs. Nebraska Municipal Fund | Templeton Global vs. Franklin High Yield |
| Franklin Lifesmart vs. American Funds 2060 | Franklin Lifesmart vs. American Funds 2060 | Franklin Lifesmart vs. Fidelity Freedom Index | Franklin Lifesmart vs. Fidelity Freedom 2060 |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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