Correlation Between Franklin Templeton and Franklin Strategic
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Franklin Strategic 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 Templeton and Franklin Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton Smacs and Franklin Strategic Income, you can compare the effects of market volatilities on Franklin Templeton and Franklin Strategic 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 Templeton with a short position of Franklin Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Franklin Strategic.
Diversification Opportunities for Franklin Templeton and Franklin Strategic
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Franklin is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Smacs and Franklin Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Strategic Income and Franklin Templeton 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 Templeton Smacs are associated (or correlated) with Franklin Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Strategic Income has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Franklin Strategic go up and down completely randomly.
Pair Corralation between Franklin Templeton and Franklin Strategic
Assuming the 90 days horizon Franklin Templeton Smacs is expected to generate 1.07 times more return on investment than Franklin Strategic. However, Franklin Templeton is 1.07 times more volatile than Franklin Strategic Income. It trades about -0.06 of its potential returns per unit of risk. Franklin Strategic Income is currently generating about -0.13 per unit of risk. If you would invest 895.00 in Franklin Templeton Smacs on September 23, 2024 and sell it today you would lose (10.00) from holding Franklin Templeton Smacs or give up 1.12% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Templeton Smacs vs. Franklin Strategic Income
Performance |
Timeline |
Franklin Templeton Smacs |
Franklin Strategic Income |
Franklin Templeton and Franklin Strategic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Templeton and Franklin Strategic
The main advantage of trading using opposite Franklin Templeton and Franklin Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Franklin Strategic 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 Strategic will offset losses from the drop in Franklin Strategic's long position.Franklin Templeton vs. Goldman Sachs Financial | Franklin Templeton vs. Icon Financial Fund | Franklin Templeton vs. John Hancock Financial | Franklin Templeton vs. Fidelity Advisor Financial |
Franklin Strategic vs. Franklin Mutual Beacon | Franklin Strategic vs. Templeton Developing Markets | Franklin Strategic vs. Franklin Mutual Global | Franklin Strategic 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |