Correlation Between Franklin Templeton and Franklin Small
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Franklin Small 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 Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton Smacs and Franklin Small Cap, you can compare the effects of market volatilities on Franklin Templeton and Franklin Small 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 Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Franklin Small.
Diversification Opportunities for Franklin Templeton and Franklin Small
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Franklin is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Smacs and Franklin Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Small Cap 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 Smacs are associated (or correlated) with Franklin Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Small Cap has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Franklin Small go up and down completely randomly.
Pair Corralation between Franklin Templeton and Franklin Small
Assuming the 90 days horizon Franklin Templeton Smacs is expected to generate 0.83 times more return on investment than Franklin Small. However, Franklin Templeton Smacs is 1.2 times less risky than Franklin Small. It trades about 0.04 of its potential returns per unit of risk. Franklin Small Cap is currently generating about 0.03 per unit of risk. If you would invest 736.00 in Franklin Templeton Smacs on September 26, 2024 and sell it today you would earn a total of 128.00 from holding Franklin Templeton Smacs or generate 17.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
Franklin Templeton Smacs vs. Franklin Small Cap
Performance |
Timeline |
Franklin Templeton Smacs |
Franklin Small Cap |
Franklin Templeton and Franklin Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Templeton and Franklin Small
The main advantage of trading using opposite Franklin Templeton and Franklin Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Franklin Small 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 Small will offset losses from the drop in Franklin Small's long position.Franklin Templeton vs. Franklin Mutual Beacon | Franklin Templeton vs. Templeton Developing Markets | Franklin Templeton vs. Franklin Mutual Global | Franklin Templeton vs. Franklin Mutual Global |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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