Correlation Between Franklin Templeton and TrueShares Active
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and TrueShares Active 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 TrueShares Active 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 TrueShares Active Yield, you can compare the effects of market volatilities on Franklin Templeton and TrueShares Active 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 TrueShares Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and TrueShares Active.
Diversification Opportunities for Franklin Templeton and TrueShares Active
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and TrueShares is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and TrueShares Active Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TrueShares Active Yield 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 TrueShares Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TrueShares Active Yield has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and TrueShares Active go up and down completely randomly.
Pair Corralation between Franklin Templeton and TrueShares Active
Given the investment horizon of 90 days Franklin Templeton ETF is expected to generate 1.44 times more return on investment than TrueShares Active. However, Franklin Templeton is 1.44 times more volatile than TrueShares Active Yield. It trades about 0.07 of its potential returns per unit of risk. TrueShares Active Yield is currently generating about 0.05 per unit of risk. If you would invest 2,059 in Franklin Templeton ETF on September 13, 2024 and sell it today you would earn a total of 677.87 from holding Franklin Templeton ETF or generate 32.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.72% |
| Values | Daily Returns |
Franklin Templeton ETF vs. TrueShares Active Yield
Performance |
| Timeline |
| Franklin Templeton ETF |
| TrueShares Active Yield |
Franklin Templeton and TrueShares Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and TrueShares Active
The main advantage of trading using opposite Franklin Templeton and TrueShares Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, TrueShares Active 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 TrueShares Active will offset losses from the drop in TrueShares Active's long position.| Franklin Templeton vs. Franklin Core Dividend | Franklin Templeton vs. Franklin International Core | Franklin Templeton vs. WisdomTree Trust | Franklin Templeton vs. First Trust Exchange Traded |
| TrueShares Active vs. Cambria Trinity ETF | TrueShares Active vs. Northern Lights | TrueShares Active vs. Cambria Global Momentum | TrueShares Active vs. Alpha Architect Value |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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