Correlation Between Franklin Libertyshares and JLEN Environmental

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

By analyzing existing cross correlation between Franklin Libertyshares ICAV and JLEN Environmental Assets, you can compare the effects of market volatilities on Franklin Libertyshares and JLEN Environmental 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 Libertyshares with a short position of JLEN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Libertyshares and JLEN Environmental.

Diversification Opportunities for Franklin Libertyshares and JLEN Environmental

0.45

Correlation Coefficient

Franklin Libertyshares  JLEN Environmental

Very weak diversification

The 3 months correlation between Franklin and JLEN is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Libertyshares ICAV and JLEN Environmental Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JLEN Environmental Assets and Franklin Libertyshares 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 Libertyshares ICAV are associated (or correlated) with JLEN Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JLEN Environmental Assets has no effect on the direction of Franklin Libertyshares i.e., Franklin Libertyshares and JLEN Environmental go up and down completely randomly.

Pair Corralation between Franklin Libertyshares and JLEN Environmental

Assuming the 90 days trading horizon Franklin Libertyshares ICAV is expected to generate 0.73 times more return on investment than JLEN Environmental. However, Franklin Libertyshares ICAV is 1.37 times less risky than JLEN Environmental. It trades about 0.05 of its potential returns per unit of risk. JLEN Environmental Assets is currently generating about -0.26 per unit of risk. If you would invest  2,772  in Franklin Libertyshares ICAV on September 12, 2024 and sell it today you would earn a total of  77.00  from holding Franklin Libertyshares ICAV or generate 2.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.75%
Values	Daily Returns

Franklin Libertyshares ICAV  vs.  JLEN Environmental Assets

Franklin Libertyshares

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Libertyshares ICAV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Franklin Libertyshares is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

JLEN Environmental Assets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JLEN Environmental Assets has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Franklin Libertyshares and JLEN Environmental

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

The idea behind Franklin Libertyshares ICAV and JLEN Environmental Assets 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.