Correlation Between Franklin Core and Franklin International
Can any of the company-specific risk be diversified away by investing in both Franklin Core and Franklin International 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 Franklin Core and Franklin International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Core Dividend and Franklin International Core, you can compare the effects of market volatilities on Franklin Core and Franklin International 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 Franklin Core with a short position of Franklin International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Core and Franklin International.
Diversification Opportunities for Franklin Core and Franklin International
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Franklin is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Core Dividend and Franklin International Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin International and Franklin Core 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 Franklin Core Dividend are associated (or correlated) with Franklin International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin International has no effect on the direction of Franklin Core i.e., Franklin Core and Franklin International go up and down completely randomly.
Pair Corralation between Franklin Core and Franklin International
Given the investment horizon of 90 days Franklin Core Dividend is expected to generate 0.97 times more return on investment than Franklin International. However, Franklin Core Dividend is 1.03 times less risky than Franklin International. It trades about 0.11 of its potential returns per unit of risk. Franklin International Core is currently generating about 0.05 per unit of risk. If you would invest 3,127 in Franklin Core Dividend on November 2, 2024 and sell it today you would earn a total of 1,552 from holding Franklin Core Dividend or generate 49.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Core Dividend vs. Franklin International Core
Performance |
| Timeline |
| Franklin Core Dividend |
| Franklin International |
Franklin Core and Franklin International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Core and Franklin International
The main advantage of trading using opposite Franklin Core and Franklin International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Core position performs unexpectedly, Franklin International 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 International will offset losses from the drop in Franklin International's long position.| Franklin Core vs. WisdomTree Trust | Franklin Core vs. Franklin International Core | Franklin Core vs. Franklin Templeton ETF | Franklin Core vs. Affinity World Leaders |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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