Correlation Between InfraCap MLP and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both InfraCap MLP and Franklin Templeton 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 InfraCap MLP and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfraCap MLP ETF and Franklin Templeton ETF, you can compare the effects of market volatilities on InfraCap MLP and Franklin Templeton 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 InfraCap MLP with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfraCap MLP and Franklin Templeton.
Diversification Opportunities for InfraCap MLP and Franklin Templeton
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InfraCap and Franklin is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding InfraCap MLP ETF and Franklin Templeton ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton ETF and InfraCap MLP 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 InfraCap MLP ETF are associated (or correlated) with Franklin Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Templeton ETF has no effect on the direction of InfraCap MLP i.e., InfraCap MLP and Franklin Templeton go up and down completely randomly.
Pair Corralation between InfraCap MLP and Franklin Templeton
Given the investment horizon of 90 days InfraCap MLP ETF is expected to generate 3.25 times more return on investment than Franklin Templeton. However, InfraCap MLP is 3.25 times more volatile than Franklin Templeton ETF. It trades about 0.48 of its potential returns per unit of risk. Franklin Templeton ETF is currently generating about 0.05 per unit of risk. If you would invest 3,972 in InfraCap MLP ETF on August 29, 2024 and sell it today you would earn a total of 553.00 from holding InfraCap MLP ETF or generate 13.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InfraCap MLP ETF vs. Franklin Templeton ETF
Performance |
| Timeline |
| InfraCap MLP ETF |
| Franklin Templeton ETF |
InfraCap MLP and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfraCap MLP and Franklin Templeton
The main advantage of trading using opposite InfraCap MLP and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfraCap MLP position performs unexpectedly, Franklin Templeton 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 Templeton will offset losses from the drop in Franklin Templeton's long position.| InfraCap MLP vs. Virtus InfraCap Preferred | InfraCap MLP vs. Global X MLP | InfraCap MLP vs. Amplify High Income | InfraCap MLP vs. Alerian MLP ETF |
| Franklin Templeton vs. iShares Agency Bond | Franklin Templeton vs. iShares GNMA Bond | Franklin Templeton vs. iShares JP Morgan | Franklin Templeton vs. iShares Aaa |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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