Correlation Between Templeton Global and Franklin Natural
Can any of the company-specific risk be diversified away by investing in both Templeton Global and Franklin Natural 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 Natural 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 Natural Resources, you can compare the effects of market volatilities on Templeton Global and Franklin Natural 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 Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and Franklin Natural.
Diversification Opportunities for Templeton Global and Franklin Natural
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and FRANKLIN is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Bond and Franklin Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Natural Res 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 Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Natural Res has no effect on the direction of Templeton Global i.e., Templeton Global and Franklin Natural go up and down completely randomly.
Pair Corralation between Templeton Global and Franklin Natural
Assuming the 90 days horizon Templeton Global Bond is expected to under-perform the Franklin Natural. But the mutual fund apears to be less risky and, when comparing its historical volatility, Templeton Global Bond is 2.04 times less risky than Franklin Natural. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Franklin Natural Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,835 in Franklin Natural Resources on August 27, 2024 and sell it today you would earn a total of 380.00 from holding Franklin Natural Resources or generate 13.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Global Bond vs. Franklin Natural Resources
Performance |
| Timeline |
| Templeton Global Bond |
| Franklin Natural Res |
Templeton Global and Franklin Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Global and Franklin Natural
The main advantage of trading using opposite Templeton Global and Franklin Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Global position performs unexpectedly, Franklin Natural 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 Natural will offset losses from the drop in Franklin Natural's long position.| Templeton Global vs. Franklin Mutual Beacon | Templeton Global vs. Templeton Developing Markets | Templeton Global vs. Franklin Mutual Global | Templeton Global vs. Franklin Mutual Global |
| Franklin Natural vs. Prudential High Yield | Franklin Natural vs. Fidelity Capital Income | Franklin Natural vs. Pioneer High Yield | Franklin Natural vs. Virtus High Yield |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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