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 Kensho, 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
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and SPDR is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and SPDR SP Kensho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Kensho 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 Kensho 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 ETF is expected to generate 0.6 times more return on investment than SPDR SP. However, Franklin Templeton ETF is 1.65 times less risky than SPDR SP. It trades about 0.04 of its potential returns per unit of risk. SPDR SP Kensho is currently generating about 0.0 per unit of risk. If you would invest 2,549 in Franklin Templeton ETF on August 29, 2024 and sell it today you would earn a total of 135.00 from holding Franklin Templeton ETF or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton ETF vs. SPDR SP Kensho
Performance |
| Timeline |
| Franklin Templeton ETF |
| SPDR SP Kensho |
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 |
| SPDR SP vs. Freedom Day Dividend | SPDR SP vs. Franklin Templeton ETF | SPDR SP vs. iShares MSCI China | SPDR SP 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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