Correlation Between Franklin Templeton and Franklin Core

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

By analyzing existing cross correlation between Franklin Templeton ETF and Franklin Core Dividend, you can compare the effects of market volatilities on Franklin Templeton and Franklin Core 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 Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Franklin Core.

Diversification Opportunities for Franklin Templeton and Franklin Core

1.0

Correlation Coefficient

Franklin Templeton  Franklin Core

No risk reduction

The 3 months correlation between Franklin and Franklin is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and Franklin Core Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Core Dividend 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 ETF are associated (or correlated) with Franklin Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Core Dividend has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Franklin Core go up and down completely randomly.

Pair Corralation between Franklin Templeton and Franklin Core

Given the investment horizon of 90 days Franklin Templeton ETF is expected to generate 1.07 times more return on investment than Franklin Core. However, Franklin Templeton is 1.07 times more volatile than Franklin Core Dividend. It trades about 0.22 of its potential returns per unit of risk. Franklin Core Dividend is currently generating about 0.22 per unit of risk. If you would invest  4,807  in Franklin Templeton ETF on September 4, 2024 and sell it today you would earn a total of  498.00  from holding Franklin Templeton ETF or generate 10.36% return on investment over 90 days.

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

Franklin Templeton ETF  vs.  Franklin Core Dividend

Franklin Templeton ETF

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Templeton ETF are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Franklin Templeton may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Franklin Core Dividend

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Core Dividend are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward indicators, Franklin Core may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Franklin Templeton and Franklin Core

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

The idea behind Franklin Templeton ETF and Franklin Core Dividend 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.

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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.