Correlation Between Templeton Growth and Franklin Income
Can any of the company-specific risk be diversified away by investing in both Templeton Growth and Franklin Income 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 Growth and Franklin Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Growth Fund and Franklin Income Fund, you can compare the effects of market volatilities on Templeton Growth and Franklin Income 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 Growth with a short position of Franklin Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Growth and Franklin Income.
Diversification Opportunities for Templeton Growth and Franklin Income
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Templeton and Franklin is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Growth Fund and Franklin Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Income and Templeton Growth 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 Growth Fund are associated (or correlated) with Franklin Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Income has no effect on the direction of Templeton Growth i.e., Templeton Growth and Franklin Income go up and down completely randomly.
Pair Corralation between Templeton Growth and Franklin Income
Assuming the 90 days horizon Templeton Growth is expected to generate 2.23 times less return on investment than Franklin Income. In addition to that, Templeton Growth is 2.48 times more volatile than Franklin Income Fund. It trades about 0.02 of its total potential returns per unit of risk. Franklin Income Fund is currently generating about 0.13 per unit of volatility. If you would invest 240.00 in Franklin Income Fund on August 29, 2024 and sell it today you would earn a total of 2.00 from holding Franklin Income Fund or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Growth Fund vs. Franklin Income Fund
Performance |
| Timeline |
| Templeton Growth |
| Franklin Income |
Templeton Growth and Franklin Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Growth and Franklin Income
The main advantage of trading using opposite Templeton Growth and Franklin Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Growth position performs unexpectedly, Franklin Income 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 Income will offset losses from the drop in Franklin Income's long position.| Templeton Growth vs. Franklin Mutual Beacon | Templeton Growth vs. Templeton Developing Markets | Templeton Growth vs. Franklin Mutual Global | Templeton Growth vs. Franklin Mutual Global |
| Franklin Income vs. Franklin Mutual Beacon | Franklin Income vs. Templeton Developing Markets | Franklin Income vs. Franklin Mutual Global | Franklin Income vs. Franklin Mutual Global |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |