Correlation Between Barclays PLC and Franklin Resources,

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

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

Diversification Opportunities for Barclays PLC and Franklin Resources,

0.88

Correlation Coefficient

Barclays PLC  Franklin Resources,

Very poor diversification

The 3 months correlation between Barclays and Franklin is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Barclays PLC and Franklin Resources, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Resources, and Barclays PLC 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 Barclays PLC are associated (or correlated) with Franklin Resources,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Resources, has no effect on the direction of Barclays PLC i.e., Barclays PLC and Franklin Resources, go up and down completely randomly.

Pair Corralation between Barclays PLC and Franklin Resources,

Assuming the 90 days trading horizon Barclays PLC is expected to generate 1.42 times less return on investment than Franklin Resources,. In addition to that, Barclays PLC is 1.02 times more volatile than Franklin Resources,. It trades about 0.2 of its total potential returns per unit of risk. Franklin Resources, is currently generating about 0.29 per unit of volatility. If you would invest  10,520  in Franklin Resources, on April 25, 2025 and sell it today you would earn a total of  3,214  from holding Franklin Resources, or generate 30.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Barclays PLC  vs.  Franklin Resources,

Barclays PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Barclays PLC are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Barclays PLC sustained solid returns over the last few months and may actually be approaching a breakup point.

Franklin Resources,

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Resources, are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Franklin Resources, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Barclays PLC and Franklin Resources,

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

The idea behind Barclays PLC and Franklin Resources, 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.