Correlation Between Franklin Templeton and Federated Investors
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Federated Investors 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 Federated Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton Limited and Federated Investors B, you can compare the effects of market volatilities on Franklin Templeton and Federated Investors 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 Federated Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Federated Investors.
Diversification Opportunities for Franklin Templeton and Federated Investors
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Federated is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Limited and Federated Investors B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Investors 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 Limited are associated (or correlated) with Federated Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Investors has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Federated Investors go up and down completely randomly.
Pair Corralation between Franklin Templeton and Federated Investors
Considering the 90-day investment horizon Franklin Templeton is expected to generate 1.71 times less return on investment than Federated Investors. But when comparing it to its historical volatility, Franklin Templeton Limited is 2.4 times less risky than Federated Investors. It trades about 0.35 of its potential returns per unit of risk. Federated Investors B is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 4,014 in Federated Investors B on September 6, 2024 and sell it today you would earn a total of 266.00 from holding Federated Investors B or generate 6.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Templeton Limited vs. Federated Investors B
Performance |
Timeline |
Franklin Templeton |
Federated Investors |
Franklin Templeton and Federated Investors Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Templeton and Federated Investors
The main advantage of trading using opposite Franklin Templeton and Federated Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Federated Investors 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 Federated Investors will offset losses from the drop in Federated Investors' long position.Franklin Templeton vs. MFS Investment Grade | Franklin Templeton vs. Invesco High Income | Franklin Templeton vs. Eaton Vance National | Franklin Templeton vs. Rivernorth Opportunistic Municipalome |
Federated Investors vs. Federated Premier Municipal | Federated Investors vs. Blackrock Muniyield | Federated Investors vs. Diamond Hill Investment | Federated Investors vs. NXG NextGen Infrastructure |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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