Correlation Between Franklin Templeton and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and SPDR SP 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 SPDR SP 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 SPDR SP Global, you can compare the effects of market volatilities on Franklin Templeton and SPDR SP 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 SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and SPDR SP.
Diversification Opportunities for Franklin Templeton and SPDR SP
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and SPDR is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and SPDR SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Global 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 SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Global has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and SPDR SP go up and down completely randomly.
Pair Corralation between Franklin Templeton and SPDR SP
Given the investment horizon of 90 days Franklin Templeton is expected to generate 1.08 times less return on investment than SPDR SP. But when comparing it to its historical volatility, Franklin Templeton ETF is 1.06 times less risky than SPDR SP. It trades about 0.1 of its potential returns per unit of risk. SPDR SP Global is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,007 in SPDR SP Global on November 4, 2024 and sell it today you would earn a total of 107.00 from holding SPDR SP Global or generate 1.78% 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. SPDR SP Global
Performance |
| Timeline |
| Franklin Templeton ETF |
| SPDR SP Global |
Franklin Templeton and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and SPDR SP
The main advantage of trading using opposite Franklin Templeton and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP'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 |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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