Correlation Between Franklin Templeton and The Hartford

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

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

Diversification Opportunities for Franklin Templeton and The Hartford

0.54

Correlation Coefficient

Franklin Templeton  The Hartford

Very weak diversification

The 3 months correlation between Franklin and The is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Multi Asset and The Hartford Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Healthcare 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 Multi Asset are associated (or correlated) with The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Healthcare has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and The Hartford go up and down completely randomly.

Pair Corralation between Franklin Templeton and The Hartford

Assuming the 90 days horizon Franklin Templeton is expected to generate 5.7 times less return on investment than The Hartford. But when comparing it to its historical volatility, Franklin Templeton Multi Asset is 5.02 times less risky than The Hartford. It trades about 0.13 of its potential returns per unit of risk. The Hartford Healthcare is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  4,365  in The Hartford Healthcare on October 24, 2024 and sell it today you would earn a total of  97.00  from holding The Hartford Healthcare or generate 2.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Franklin Templeton Multi Asset  vs.  The Hartford Healthcare

Franklin Templeton

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Templeton Multi Asset has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Franklin Templeton is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

The Hartford Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Hartford Healthcare has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Franklin Templeton and The Hartford

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

The idea behind Franklin Templeton Multi Asset and The Hartford Healthcare 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.