Correlation Between ASHX and Franklin Templeton

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

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

Diversification Opportunities for ASHX and Franklin Templeton

0.0

Correlation Coefficient

ASHX  Franklin Templeton

Pay attention - limited upside

The 3 months correlation between ASHX and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ASHX and Franklin Templeton Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton and ASHX 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 ASHX 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 ASHX i.e., ASHX and Franklin Templeton go up and down completely randomly.

Pair Corralation between ASHX and Franklin Templeton

If you would invest (100.00) in Franklin Templeton Investments on December 26, 2024 and sell it today you would earn a total of  100.00  from holding Franklin Templeton Investments or generate -100.0% return on investment over 90 days.

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

ASHX  vs.  Franklin Templeton Investments

ASHX

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASHX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, ASHX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Franklin Templeton

Risk-Adjusted Performance

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.

Pair Trading with ASHX and Franklin Templeton

The main advantage of trading using opposite ASHX and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASHX 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 ASHX 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.