Correlation Between Franklin Templeton and VanEck CMCI
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and VanEck CMCI 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 Templeton and VanEck CMCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton ETF and VanEck CMCI Commodity, you can compare the effects of market volatilities on Franklin Templeton and VanEck CMCI 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 Templeton with a short position of VanEck CMCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and VanEck CMCI.
Diversification Opportunities for Franklin Templeton and VanEck CMCI
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and VanEck is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and VanEck CMCI Commodity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck CMCI Commodity and Franklin Templeton 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 Templeton ETF are associated (or correlated) with VanEck CMCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck CMCI Commodity has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and VanEck CMCI go up and down completely randomly.
Pair Corralation between Franklin Templeton and VanEck CMCI
Given the investment horizon of 90 days Franklin Templeton is expected to generate 1.03 times less return on investment than VanEck CMCI. But when comparing it to its historical volatility, Franklin Templeton ETF is 1.86 times less risky than VanEck CMCI. It trades about 0.12 of its potential returns per unit of risk. VanEck CMCI Commodity is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,459 in VanEck CMCI Commodity on November 2, 2024 and sell it today you would earn a total of 48.00 from holding VanEck CMCI Commodity or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton ETF vs. VanEck CMCI Commodity
Performance |
| Timeline |
| Franklin Templeton ETF |
| VanEck CMCI Commodity |
Franklin Templeton and VanEck CMCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and VanEck CMCI
The main advantage of trading using opposite Franklin Templeton and VanEck CMCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, VanEck CMCI 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 VanEck CMCI will offset losses from the drop in VanEck CMCI's long position.| Franklin Templeton vs. Franklin Core Dividend | Franklin Templeton vs. Franklin International Core | Franklin Templeton vs. First Trust Exchange Traded |
| VanEck CMCI vs. Freedom Day Dividend | VanEck CMCI vs. Franklin Templeton ETF | VanEck CMCI vs. iShares MSCI China | VanEck CMCI vs. Tidal Trust II |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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