Correlation Between Templeton Foreign and Franklin Small
Can any of the company-specific risk be diversified away by investing in both Templeton Foreign 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 Templeton Foreign and Franklin Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Foreign Fund and Franklin Small Mid Cap, you can compare the effects of market volatilities on Templeton Foreign 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 Templeton Foreign with a short position of Franklin Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Foreign and Franklin Small.
Diversification Opportunities for Templeton Foreign and Franklin Small
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Templeton and Franklin is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Foreign Fund and Franklin Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Small Mid and Templeton Foreign 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 Foreign Fund 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 Mid has no effect on the direction of Templeton Foreign i.e., Templeton Foreign and Franklin Small go up and down completely randomly.
Pair Corralation between Templeton Foreign and Franklin Small
Assuming the 90 days horizon Templeton Foreign Fund is expected to under-perform the Franklin Small. In addition to that, Templeton Foreign is 1.04 times more volatile than Franklin Small Mid Cap. It trades about -0.04 of its total potential returns per unit of risk. Franklin Small Mid Cap is currently generating about 0.09 per unit of volatility. If you would invest 1,614 in Franklin Small Mid Cap on September 26, 2024 and sell it today you would earn a total of 180.00 from holding Franklin Small Mid Cap or generate 11.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Templeton Foreign Fund vs. Franklin Small Mid Cap
Performance |
Timeline |
Templeton Foreign |
Franklin Small Mid |
Templeton Foreign and Franklin Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Templeton Foreign and Franklin Small
The main advantage of trading using opposite Templeton Foreign and Franklin Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Foreign 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.Templeton Foreign vs. Franklin Small Mid Cap | Templeton Foreign vs. Blackrock Glbl Sm | Templeton Foreign vs. Blackrock Fundamental Growth | Templeton Foreign vs. Blackrock Gbl Alloc |
Franklin Small vs. Templeton Foreign Fund | Franklin Small vs. Franklin Growth Fund | Franklin Small vs. Franklin Balance Sheet | Franklin Small vs. Templeton Developing Markets |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
CEOs Directory Screen CEOs from public companies around the world | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |