Correlation Between InfraCap MLP and Franklin Exponential
Can any of the company-specific risk be diversified away by investing in both InfraCap MLP and Franklin Exponential 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 Exponential 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 Exponential Data, you can compare the effects of market volatilities on InfraCap MLP and Franklin Exponential 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 Exponential. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfraCap MLP and Franklin Exponential.
Diversification Opportunities for InfraCap MLP and Franklin Exponential
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InfraCap and Franklin is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding InfraCap MLP ETF and Franklin Exponential Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Exponential Data 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 Exponential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Exponential Data has no effect on the direction of InfraCap MLP i.e., InfraCap MLP and Franklin Exponential go up and down completely randomly.
Pair Corralation between InfraCap MLP and Franklin Exponential
Given the investment horizon of 90 days InfraCap MLP ETF is expected to generate 0.9 times more return on investment than Franklin Exponential. However, InfraCap MLP ETF is 1.11 times less risky than Franklin Exponential. It trades about 0.47 of its potential returns per unit of risk. Franklin Exponential Data is currently generating about 0.3 per unit of risk. If you would invest 4,021 in InfraCap MLP ETF on August 26, 2024 and sell it today you would earn a total of 524.00 from holding InfraCap MLP ETF or generate 13.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InfraCap MLP ETF vs. Franklin Exponential Data
Performance |
| Timeline |
| InfraCap MLP ETF |
| Franklin Exponential Data |
InfraCap MLP and Franklin Exponential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfraCap MLP and Franklin Exponential
The main advantage of trading using opposite InfraCap MLP and Franklin Exponential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfraCap MLP position performs unexpectedly, Franklin Exponential 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 Exponential will offset losses from the drop in Franklin Exponential'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 Exponential vs. Franklin Disruptive Commerce | Franklin Exponential vs. Franklin Templeton ETF | Franklin Exponential vs. Esoterica NextG Economy | Franklin Exponential vs. TrueShares Technology AI |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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