Correlation Between Templeton Growth and Franklin Balance
Can any of the company-specific risk be diversified away by investing in both Templeton Growth and Franklin Balance 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 Templeton Growth and Franklin Balance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Growth Fund and Franklin Balance Sheet, you can compare the effects of market volatilities on Templeton Growth and Franklin Balance 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 Templeton Growth with a short position of Franklin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Growth and Franklin Balance.
Diversification Opportunities for Templeton Growth and Franklin Balance
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Templeton and Franklin is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Growth Fund and Franklin Balance Sheet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Balance Sheet and Templeton Growth 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 Templeton Growth Fund are associated (or correlated) with Franklin Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Balance Sheet has no effect on the direction of Templeton Growth i.e., Templeton Growth and Franklin Balance go up and down completely randomly.
Pair Corralation between Templeton Growth and Franklin Balance
Assuming the 90 days horizon Templeton Growth Fund is expected to generate 0.74 times more return on investment than Franklin Balance. However, Templeton Growth Fund is 1.35 times less risky than Franklin Balance. It trades about -0.11 of its potential returns per unit of risk. Franklin Balance Sheet is currently generating about -0.13 per unit of risk. If you would invest 2,746 in Templeton Growth Fund on October 12, 2024 and sell it today you would lose (130.00) from holding Templeton Growth Fund or give up 4.73% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Templeton Growth Fund vs. Franklin Balance Sheet
Performance |
Timeline |
Templeton Growth |
Franklin Balance Sheet |
Templeton Growth and Franklin Balance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Templeton Growth and Franklin Balance
The main advantage of trading using opposite Templeton Growth and Franklin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Growth position performs unexpectedly, Franklin Balance 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 Balance will offset losses from the drop in Franklin Balance's long position.Templeton Growth vs. Federated Global Allocation | Templeton Growth vs. Kinetics Global Fund | Templeton Growth vs. Investec Global Franchise | Templeton Growth vs. Barings Global Floating |
Franklin Balance vs. Mesirow Financial Small | Franklin Balance vs. Goldman Sachs Financial | Franklin Balance vs. Financials Ultrasector Profund | Franklin Balance vs. Fidelity Advisor Financial |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |