Correlation Between Templeton Foreign and Franklin Corefolio
Can any of the company-specific risk be diversified away by investing in both Templeton Foreign and Franklin Corefolio 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 Foreign and Franklin Corefolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Foreign Fund and Franklin Efolio Allocation, you can compare the effects of market volatilities on Templeton Foreign and Franklin Corefolio 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 Foreign with a short position of Franklin Corefolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Foreign and Franklin Corefolio.
Diversification Opportunities for Templeton Foreign and Franklin Corefolio
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and FRANKLIN is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Foreign Fund and Franklin Efolio Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Efolio Allo and Templeton Foreign 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 Foreign Fund are associated (or correlated) with Franklin Corefolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Efolio Allo has no effect on the direction of Templeton Foreign i.e., Templeton Foreign and Franklin Corefolio go up and down completely randomly.
Pair Corralation between Templeton Foreign and Franklin Corefolio
Assuming the 90 days horizon Templeton Foreign Fund is expected to under-perform the Franklin Corefolio. In addition to that, Templeton Foreign is 1.42 times more volatile than Franklin Efolio Allocation. It trades about -0.11 of its total potential returns per unit of risk. Franklin Efolio Allocation is currently generating about 0.3 per unit of volatility. If you would invest 2,374 in Franklin Efolio Allocation on September 4, 2024 and sell it today you would earn a total of 109.00 from holding Franklin Efolio Allocation or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Foreign Fund vs. Franklin Efolio Allocation
Performance |
| Timeline |
| Templeton Foreign |
| Franklin Efolio Allo |
Templeton Foreign and Franklin Corefolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Foreign and Franklin Corefolio
The main advantage of trading using opposite Templeton Foreign and Franklin Corefolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Foreign position performs unexpectedly, Franklin Corefolio 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 Corefolio will offset losses from the drop in Franklin Corefolio's long position.| Templeton Foreign vs. Franklin Mutual Beacon | Templeton Foreign vs. Templeton Developing Markets | Templeton Foreign vs. Franklin Mutual Global | Templeton Foreign vs. Franklin Mutual Global |
| Franklin Corefolio vs. Franklin Founding Funds | Franklin Corefolio vs. Franklin Growth Allocation | Franklin Corefolio vs. Franklin Growth Fund | Franklin Corefolio vs. Franklin Growth Opportunities |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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