Correlation Between Franklin Rising and Templeton Global

Can any of the company-specific risk be diversified away by investing in both Franklin Rising and Templeton Global 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 Rising and Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Franklin Rising Dividends and Templeton Global Bond, you can compare the effects of market volatilities on Franklin Rising and Templeton Global 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 Rising with a short position of Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Rising and Templeton Global.

Diversification Opportunities for Franklin Rising and Templeton Global

0.17

Correlation Coefficient

Franklin Rising  Templeton Global

Average diversification

The 3 months correlation between Franklin and Templeton is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Rising Dividends and Templeton Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Bond and Franklin Rising 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 Rising Dividends are associated (or correlated) with Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global Bond has no effect on the direction of Franklin Rising i.e., Franklin Rising and Templeton Global go up and down completely randomly.

Pair Corralation between Franklin Rising and Templeton Global

Assuming the 90 days horizon Franklin Rising Dividends is expected to generate 1.36 times more return on investment than Templeton Global. However, Franklin Rising is 1.36 times more volatile than Templeton Global Bond. It trades about 0.03 of its potential returns per unit of risk. Templeton Global Bond is currently generating about -0.04 per unit of risk. If you would invest  8,140  in Franklin Rising Dividends on September 27, 2024 and sell it today you would earn a total of  909.00  from holding Franklin Rising Dividends or generate 11.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Franklin Rising Dividends  vs.  Templeton Global Bond

Franklin Rising Dividends

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Rising Dividends has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Templeton Global Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Templeton Global Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental drivers remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Franklin Rising and Templeton Global

The main advantage of trading using opposite Franklin Rising and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Rising position performs unexpectedly, Templeton Global 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 Templeton Global will offset losses from the drop in Templeton Global's long position.

The idea behind Franklin Rising Dividends and Templeton Global Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.