Correlation Between Templeton Emerging and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both Templeton Emerging and Franklin Templeton 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 Emerging and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Emerging Markets and Franklin Templeton Limited, you can compare the effects of market volatilities on Templeton Emerging and Franklin Templeton 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 Emerging with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Emerging and Franklin Templeton.
Diversification Opportunities for Templeton Emerging and Franklin Templeton
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 Emerging Markets and Franklin Templeton Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton and Templeton Emerging 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 Emerging Markets are associated (or correlated) with Franklin Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Templeton has no effect on the direction of Templeton Emerging i.e., Templeton Emerging and Franklin Templeton go up and down completely randomly.
Pair Corralation between Templeton Emerging and Franklin Templeton
Considering the 90-day investment horizon Templeton Emerging Markets is expected to generate 1.25 times more return on investment than Franklin Templeton. However, Templeton Emerging is 1.25 times more volatile than Franklin Templeton Limited. It trades about 0.5 of its potential returns per unit of risk. Franklin Templeton Limited is currently generating about 0.13 per unit of risk. If you would invest 510.00 in Templeton Emerging Markets on November 2, 2024 and sell it today you would earn a total of 38.00 from holding Templeton Emerging Markets or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Templeton Emerging Markets vs. Franklin Templeton Limited
Performance |
| Timeline |
| Templeton Emerging |
| Franklin Templeton |
Templeton Emerging and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Emerging and Franklin Templeton
The main advantage of trading using opposite Templeton Emerging and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Emerging position performs unexpectedly, Franklin Templeton 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 Templeton will offset losses from the drop in Franklin Templeton's long position.| Templeton Emerging vs. Franklin Templeton Limited | Templeton Emerging vs. Western Asset Global | Templeton Emerging vs. MFS Multimarket Income | Templeton Emerging vs. Aberdeen Asia Pacific If |
| Franklin Templeton vs. MFS Investment Grade | Franklin Templeton vs. Eaton Vance National | Franklin Templeton vs. Rivernorth Opportunistic Municipalome | Franklin Templeton vs. RiverNorth Managed Duration |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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