Correlation Between Franklin Liberty and Tactical Multi
Can any of the company-specific risk be diversified away by investing in both Franklin Liberty and Tactical Multi 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 Liberty and Tactical Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Liberty Ultra and Tactical Multi Purpose Fund, you can compare the effects of market volatilities on Franklin Liberty and Tactical Multi 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 Liberty with a short position of Tactical Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Liberty and Tactical Multi.
Diversification Opportunities for Franklin Liberty and Tactical Multi
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Tactical is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Liberty Ultra and Tactical Multi Purpose Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tactical Multi Purpose and Franklin Liberty 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 Liberty Ultra are associated (or correlated) with Tactical Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tactical Multi Purpose has no effect on the direction of Franklin Liberty i.e., Franklin Liberty and Tactical Multi go up and down completely randomly.
Pair Corralation between Franklin Liberty and Tactical Multi
Given the investment horizon of 90 days Franklin Liberty Ultra is expected to generate 2.61 times more return on investment than Tactical Multi. However, Franklin Liberty is 2.61 times more volatile than Tactical Multi Purpose Fund. It trades about 0.26 of its potential returns per unit of risk. Tactical Multi Purpose Fund is currently generating about 0.39 per unit of risk. If you would invest 2,475 in Franklin Liberty Ultra on January 20, 2024 and sell it today you would earn a total of 13.00 from holding Franklin Liberty Ultra or generate 0.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Liberty Ultra vs. Tactical Multi Purpose Fund
Performance |
Timeline |
Franklin Liberty Ultra |
Tactical Multi Purpose |
Franklin Liberty and Tactical Multi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Liberty and Tactical Multi
The main advantage of trading using opposite Franklin Liberty and Tactical Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Liberty position performs unexpectedly, Tactical Multi 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 Tactical Multi will offset losses from the drop in Tactical Multi's long position.Franklin Liberty vs. iShares ESG 1 5 | Franklin Liberty vs. First Trust Low | Franklin Liberty vs. First Trust Managed | Franklin Liberty vs. First Trust Senior |
Tactical Multi vs. Fisher Large Cap | Tactical Multi vs. Fisher All Foreign | Tactical Multi vs. Fisher Small Cap | Tactical Multi vs. Fisher Stock |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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