Correlation Between Franklin Templeton and JPMorgan International

Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and JPMorgan International 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 JPMorgan International 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 JPMorgan International Growth, you can compare the effects of market volatilities on Franklin Templeton and JPMorgan International 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 JPMorgan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and JPMorgan International.

Diversification Opportunities for Franklin Templeton and JPMorgan International

-0.65

Correlation Coefficient

Franklin Templeton  JPMorgan International

Excellent diversification

The 3 months correlation between Franklin and JPMorgan is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Investments and JPMorgan International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan International 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 JPMorgan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan International has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and JPMorgan International go up and down completely randomly.

Pair Corralation between Franklin Templeton and JPMorgan International

If you would invest  6,435  in JPMorgan International Growth on October 24, 2024 and sell it today you would earn a total of  23.50  from holding JPMorgan International Growth or generate 0.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.26%
Values	Daily Returns

Franklin Templeton Investments  vs.  JPMorgan International Growth

Franklin Templeton

Risk-Adjusted Performance

0 of 100

Very Strong

Over the last 90 days Franklin Templeton Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Franklin Templeton is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

JPMorgan International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Franklin Templeton and JPMorgan International

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

The idea behind Franklin Templeton Investments and JPMorgan International Growth 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.