Correlation Between Franklin Templeton and MicroSectors FANG
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and MicroSectors FANG 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 MicroSectors FANG 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 MicroSectors FANG ETN, you can compare the effects of market volatilities on Franklin Templeton and MicroSectors FANG 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 MicroSectors FANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and MicroSectors FANG.
Diversification Opportunities for Franklin Templeton and MicroSectors FANG
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and MicroSectors is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and MicroSectors FANG ETN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors FANG ETN 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 MicroSectors FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors FANG ETN has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and MicroSectors FANG go up and down completely randomly.
Pair Corralation between Franklin Templeton and MicroSectors FANG
Given the investment horizon of 90 days Franklin Templeton ETF is expected to under-perform the MicroSectors FANG. But the etf apears to be less risky and, when comparing its historical volatility, Franklin Templeton ETF is 1.76 times less risky than MicroSectors FANG. The etf trades about -0.05 of its potential returns per unit of risk. The MicroSectors FANG ETN is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5,108 in MicroSectors FANG ETN on October 26, 2024 and sell it today you would earn a total of 939.00 from holding MicroSectors FANG ETN or generate 18.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton ETF vs. MicroSectors FANG ETN
Performance |
| Timeline |
| Franklin Templeton ETF |
| MicroSectors FANG ETN |
Franklin Templeton and MicroSectors FANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and MicroSectors FANG
The main advantage of trading using opposite Franklin Templeton and MicroSectors FANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, MicroSectors FANG 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 MicroSectors FANG will offset losses from the drop in MicroSectors FANG'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 |
| MicroSectors FANG vs. Freedom Day Dividend | MicroSectors FANG vs. Franklin Templeton ETF | MicroSectors FANG vs. iShares MSCI China | MicroSectors FANG 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |