Correlation Between Franklin Templeton and Fidelity Covington
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Fidelity Covington 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 Fidelity Covington 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 Fidelity Covington Trust, you can compare the effects of market volatilities on Franklin Templeton and Fidelity Covington 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 Fidelity Covington. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Fidelity Covington.
Diversification Opportunities for Franklin Templeton and Fidelity Covington
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Fidelity is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and Fidelity Covington Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Covington Trust 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 Fidelity Covington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Covington Trust has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Fidelity Covington go up and down completely randomly.
Pair Corralation between Franklin Templeton and Fidelity Covington
Given the investment horizon of 90 days Franklin Templeton ETF is not expected to generate positive returns. Moreover, Franklin Templeton is 1.05 times more volatile than Fidelity Covington Trust. It trades away all of its potential returns to assume current level of volatility. Fidelity Covington Trust is currently generating about 0.04 per unit of risk. If you would invest 2,491 in Fidelity Covington Trust on November 1, 2024 and sell it today you would earn a total of 36.00 from holding Fidelity Covington Trust or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.0% |
| Values | Daily Returns |
Franklin Templeton ETF vs. Fidelity Covington Trust
Performance |
| Timeline |
| Franklin Templeton ETF |
| Fidelity Covington Trust |
Franklin Templeton and Fidelity Covington Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Fidelity Covington
The main advantage of trading using opposite Franklin Templeton and Fidelity Covington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Fidelity Covington 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 Fidelity Covington will offset losses from the drop in Fidelity Covington'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 |
| Fidelity Covington vs. Freedom Day Dividend | Fidelity Covington vs. Franklin Templeton ETF | Fidelity Covington vs. iShares MSCI China | Fidelity Covington 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |