Correlation Between Absolute Core and Franklin Templeton

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Can any of the company-specific risk be diversified away by investing in both Absolute Core and Franklin Templeton 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 Absolute Core and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Core Strategy and Franklin Templeton Investments, you can compare the effects of market volatilities on Absolute Core and Franklin Templeton 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 Absolute Core with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Core and Franklin Templeton.

Diversification Opportunities for Absolute Core and Franklin Templeton

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Absolute and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Core Strategy and Franklin Templeton Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton and Absolute 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 Absolute Core Strategy are associated (or correlated) with Franklin Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Templeton has no effect on the direction of Absolute Core i.e., Absolute Core and Franklin Templeton go up and down completely randomly.

Pair Corralation between Absolute Core and Franklin Templeton

If you would invest  3,118  in Absolute Core Strategy on October 20, 2024 and sell it today you would earn a total of  112.00  from holding Absolute Core Strategy or generate 3.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy5.26%
ValuesDaily Returns

Absolute Core Strategy  vs.  Franklin Templeton Investments

 Performance 
       Timeline  
Absolute Core Strategy 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Absolute Core Strategy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Absolute Core is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
Franklin Templeton 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Franklin Templeton Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Franklin Templeton is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Absolute Core and Franklin Templeton Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Absolute Core and Franklin Templeton

The main advantage of trading using opposite Absolute Core and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Core position performs unexpectedly, Franklin Templeton 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 Templeton will offset losses from the drop in Franklin Templeton's long position.
The idea behind Absolute Core Strategy and Franklin Templeton Investments 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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