Correlation Between Franklin Templeton and ETF Series
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and ETF Series 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 ETF Series 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 ETF Series Solutions, you can compare the effects of market volatilities on Franklin Templeton and ETF Series 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 ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and ETF Series.
Diversification Opportunities for Franklin Templeton and ETF Series
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and ETF is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions 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 ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and ETF Series go up and down completely randomly.
Pair Corralation between Franklin Templeton and ETF Series
Given the investment horizon of 90 days Franklin Templeton ETF is expected to generate 4.55 times more return on investment than ETF Series. However, Franklin Templeton is 4.55 times more volatile than ETF Series Solutions. It trades about 0.07 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.08 per unit of risk. If you would invest 2,054 in Franklin Templeton ETF on September 12, 2024 and sell it today you would earn a total of 681.00 from holding Franklin Templeton ETF or generate 33.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Franklin Templeton ETF vs. ETF Series Solutions
Performance |
| Timeline |
| Franklin Templeton ETF |
| ETF Series Solutions |
Franklin Templeton and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and ETF Series
The main advantage of trading using opposite Franklin Templeton and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' 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 |
| ETF Series vs. Freedom Day Dividend | ETF Series vs. Franklin Templeton ETF | ETF Series vs. iShares MSCI China | ETF Series 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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