Correlation Between United States and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Brent and Franklin Templeton ETF, you can compare the effects of market volatilities on United States 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 United States with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Franklin Templeton.
Diversification Opportunities for United States and Franklin Templeton
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Franklin is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding United States Brent 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 United States 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 United States Brent 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 United States i.e., United States and Franklin Templeton go up and down completely randomly.
Pair Corralation between United States and Franklin Templeton
Considering the 90-day investment horizon United States Brent is expected to generate 2.03 times more return on investment than Franklin Templeton. However, United States is 2.03 times more volatile than Franklin Templeton ETF. It trades about 0.39 of its potential returns per unit of risk. Franklin Templeton ETF is currently generating about -0.03 per unit of risk. If you would invest 2,928 in United States Brent on October 21, 2024 and sell it today you would earn a total of 337.00 from holding United States Brent or generate 11.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Brent vs. Franklin Templeton ETF
Performance |
| Timeline |
| United States Brent |
| Franklin Templeton ETF |
United States and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Franklin Templeton
The main advantage of trading using opposite United States and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. Invesco DB Oil | United States vs. United States 12 | United States vs. United States Gasoline | United States vs. United States Oil |
| Franklin Templeton vs. Franklin Core Dividend | Franklin Templeton vs. Franklin International Core | Franklin Templeton vs. WisdomTree Trust | Franklin Templeton vs. First Trust Exchange Traded |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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