Correlation Between Franklin Templeton and ASHX

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

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

Diversification Opportunities for Franklin Templeton and ASHX

0.17

Correlation Coefficient

Franklin Templeton  ASHX

Average diversification

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

Pair Corralation between Franklin Templeton and ASHX

If you would invest  1,845  in ASHX on September 17, 2024 and sell it today you would earn a total of  0.00  from holding ASHX or generate 0.0% return on investment over 90 days.

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

Franklin Templeton Investments  vs.  ASHX

Franklin Templeton

Risk-Adjusted Performance

0 of 100

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

ASHX

Risk-Adjusted Performance

0 of 100

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 latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Franklin Templeton and ASHX

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

The idea behind Franklin Templeton Investments and ASHX 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.