Correlation Between Franklin Federal and Short-intermediate
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Short-intermediate 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 Federal and Short-intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Federal Limited Term and Short Intermediate Bond Fund, you can compare the effects of market volatilities on Franklin Federal and Short-intermediate 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 Federal with a short position of Short-intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Short-intermediate.
Diversification Opportunities for Franklin Federal and Short-intermediate
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Short-intermediate is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Limited Term and Short Intermediate Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Intermediate Bond and Franklin Federal 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 Federal Limited Term are associated (or correlated) with Short-intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Intermediate Bond has no effect on the direction of Franklin Federal i.e., Franklin Federal and Short-intermediate go up and down completely randomly.
Pair Corralation between Franklin Federal and Short-intermediate
Assuming the 90 days horizon Franklin Federal Limited Term is expected to generate 0.61 times more return on investment than Short-intermediate. However, Franklin Federal Limited Term is 1.64 times less risky than Short-intermediate. It trades about 0.34 of its potential returns per unit of risk. Short Intermediate Bond Fund is currently generating about 0.18 per unit of risk. If you would invest 1,007 in Franklin Federal Limited Term on July 27, 2025 and sell it today you would earn a total of 35.00 from holding Franklin Federal Limited Term or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Federal Limited Term vs. Short Intermediate Bond Fund
Performance |
| Timeline |
| Franklin Federal Lim |
| Short Intermediate Bond |
Franklin Federal and Short-intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Short-intermediate
The main advantage of trading using opposite Franklin Federal and Short-intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Short-intermediate 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 Short-intermediate will offset losses from the drop in Short-intermediate's long position.| Franklin Federal vs. Dreyfusstandish Global Fixed | Franklin Federal vs. Rbc China Equity | Franklin Federal vs. Enhanced Fixed Income | Franklin Federal vs. T Rowe Price |
| Short-intermediate vs. Transamerica Short Term Bond | Short-intermediate vs. Dreyfus Short Intermediate | Short-intermediate vs. Alpine Ultra Short | Short-intermediate vs. Transam Short Term Bond |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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