Correlation Between SPDR Nuveen and Franklin Liberty
Can any of the company-specific risk be diversified away by investing in both SPDR Nuveen and Franklin Liberty 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 SPDR Nuveen and Franklin Liberty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Nuveen Bloomberg and Franklin Liberty Federal, you can compare the effects of market volatilities on SPDR Nuveen and Franklin Liberty 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 SPDR Nuveen with a short position of Franklin Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Nuveen and Franklin Liberty.
Diversification Opportunities for SPDR Nuveen and Franklin Liberty
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Franklin is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Nuveen Bloomberg and Franklin Liberty Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Liberty Federal and SPDR Nuveen 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 SPDR Nuveen Bloomberg are associated (or correlated) with Franklin Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Liberty Federal has no effect on the direction of SPDR Nuveen i.e., SPDR Nuveen and Franklin Liberty go up and down completely randomly.
Pair Corralation between SPDR Nuveen and Franklin Liberty
Considering the 90-day investment horizon SPDR Nuveen Bloomberg is expected to under-perform the Franklin Liberty. But the etf apears to be less risky and, when comparing its historical volatility, SPDR Nuveen Bloomberg is 1.09 times less risky than Franklin Liberty. The etf trades about -0.03 of its potential returns per unit of risk. The Franklin Liberty Federal is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,385 in Franklin Liberty Federal on October 22, 2024 and sell it today you would lose (11.00) from holding Franklin Liberty Federal or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Nuveen Bloomberg vs. Franklin Liberty Federal
Performance |
| Timeline |
| SPDR Nuveen Bloomberg |
| Franklin Liberty Federal |
SPDR Nuveen and Franklin Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Nuveen and Franklin Liberty
The main advantage of trading using opposite SPDR Nuveen and Franklin Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Nuveen position performs unexpectedly, Franklin Liberty 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 Liberty will offset losses from the drop in Franklin Liberty's long position.| SPDR Nuveen vs. SPDR Nuveen Bloomberg | SPDR Nuveen vs. Invesco National AMT Free | SPDR Nuveen vs. VanEck Intermediate Muni | SPDR Nuveen vs. iShares National Muni |
| Franklin Liberty vs. Franklin Liberty Intermediate | Franklin Liberty vs. IQ MacKay Municipal | Franklin Liberty vs. Xtrackers Municipal Infrastructure | Franklin Liberty vs. Hartford Municipal 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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