Correlation Between WisdomTree Managed and Franklin Liberty
Can any of the company-specific risk be diversified away by investing in both WisdomTree Managed 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 WisdomTree Managed and Franklin Liberty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Managed Futures and Franklin Liberty Federal, you can compare the effects of market volatilities on WisdomTree Managed 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 WisdomTree Managed with a short position of Franklin Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Managed and Franklin Liberty.
Diversification Opportunities for WisdomTree Managed and Franklin Liberty
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WisdomTree and Franklin is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Managed Futures 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 WisdomTree Managed 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 WisdomTree Managed Futures 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 WisdomTree Managed i.e., WisdomTree Managed and Franklin Liberty go up and down completely randomly.
Pair Corralation between WisdomTree Managed and Franklin Liberty
Given the investment horizon of 90 days WisdomTree Managed Futures is expected to generate 2.91 times more return on investment than Franklin Liberty. However, WisdomTree Managed is 2.91 times more volatile than Franklin Liberty Federal. It trades about 0.07 of its potential returns per unit of risk. Franklin Liberty Federal is currently generating about -0.02 per unit of risk. If you would invest 3,469 in WisdomTree Managed Futures on August 26, 2024 and sell it today you would earn a total of 106.00 from holding WisdomTree Managed Futures or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Managed Futures vs. Franklin Liberty Federal
Performance |
| Timeline |
| WisdomTree Managed |
| Franklin Liberty Federal |
WisdomTree Managed and Franklin Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Managed and Franklin Liberty
The main advantage of trading using opposite WisdomTree Managed and Franklin Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Managed 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.| WisdomTree Managed vs. First Trust Managed | WisdomTree Managed vs. iMGP DBi Managed | WisdomTree Managed vs. First Trust LongShort | WisdomTree Managed vs. WisdomTree CBOE SP |
| Franklin Liberty vs. Franklin Liberty Intermediate | Franklin Liberty vs. IQ MacKay Municipal | Franklin Liberty vs. Hartford Municipal Opportunities | Franklin Liberty vs. IQ MacKay Municipal |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |