Correlation Between Templeton Emerging and Franklin Balance
Can any of the company-specific risk be diversified away by investing in both Templeton Emerging and Franklin Balance 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 Balance 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 Balance Sheet, you can compare the effects of market volatilities on Templeton Emerging and Franklin Balance 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 Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Emerging and Franklin Balance.
Diversification Opportunities for Templeton Emerging and Franklin Balance
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Templeton and Franklin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Emerging Markets and Franklin Balance Sheet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Balance Sheet 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 Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Balance Sheet has no effect on the direction of Templeton Emerging i.e., Templeton Emerging and Franklin Balance go up and down completely randomly.
Pair Corralation between Templeton Emerging and Franklin Balance
Assuming the 90 days horizon Templeton Emerging Markets is expected to generate 0.75 times more return on investment than Franklin Balance. However, Templeton Emerging Markets is 1.33 times less risky than Franklin Balance. It trades about 0.12 of its potential returns per unit of risk. Franklin Balance Sheet is currently generating about -0.1 per unit of risk. If you would invest 1,330 in Templeton Emerging Markets on November 27, 2024 and sell it today you would earn a total of 16.00 from holding Templeton Emerging Markets or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Emerging Markets vs. Franklin Balance Sheet
Performance |
| Timeline |
| Templeton Emerging |
| Franklin Balance Sheet |
Templeton Emerging and Franklin Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Emerging and Franklin Balance
The main advantage of trading using opposite Templeton Emerging and Franklin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Emerging position performs unexpectedly, Franklin Balance 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 Balance will offset losses from the drop in Franklin Balance's long position.| Templeton Emerging vs. Us Government Securities | Templeton Emerging vs. Federated Government Income | Templeton Emerging vs. Dunham Porategovernment Bond | Templeton Emerging vs. John Hancock Government |
| Franklin Balance vs. Calvert Large Cap | Franklin Balance vs. Guidemark Large Cap | Franklin Balance vs. Dodge Cox Stock | Franklin Balance vs. M 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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