Correlation Between Franklin Templeton and Advisor Managed

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Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Advisor Managed 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 Advisor Managed 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 Advisor Managed Portfolios, you can compare the effects of market volatilities on Franklin Templeton and Advisor Managed 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 Advisor Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Advisor Managed.

Diversification Opportunities for Franklin Templeton and Advisor Managed

0.54
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Franklin and Advisor is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and Advisor Managed Portfolios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advisor Managed Port 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 Advisor Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advisor Managed Port has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Advisor Managed go up and down completely randomly.

Pair Corralation between Franklin Templeton and Advisor Managed

Given the investment horizon of 90 days Franklin Templeton ETF is expected to generate 0.52 times more return on investment than Advisor Managed. However, Franklin Templeton ETF is 1.91 times less risky than Advisor Managed. It trades about 0.23 of its potential returns per unit of risk. Advisor Managed Portfolios is currently generating about -0.16 per unit of risk. If you would invest  2,654  in Franklin Templeton ETF on November 27, 2024 and sell it today you would earn a total of  85.00  from holding Franklin Templeton ETF or generate 3.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Franklin Templeton ETF  vs.  Advisor Managed Portfolios

 Performance 
       Timeline  
Franklin Templeton ETF 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Templeton ETF are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Franklin Templeton is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
Advisor Managed Port 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Advisor Managed Portfolios has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Advisor Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Franklin Templeton and Advisor Managed Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Franklin Templeton and Advisor Managed

The main advantage of trading using opposite Franklin Templeton and Advisor Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Advisor Managed 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 Advisor Managed will offset losses from the drop in Advisor Managed's long position.
The idea behind Franklin Templeton ETF and Advisor Managed Portfolios pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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