Correlation Between Franklin Templeton and T Rex
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and T Rex 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 T Rex 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 T Rex 2X Long, you can compare the effects of market volatilities on Franklin Templeton and T Rex 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 T Rex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and T Rex.
Diversification Opportunities for Franklin Templeton and T Rex
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and NVDX is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and T Rex 2X Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rex 2X 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 T Rex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rex 2X has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and T Rex go up and down completely randomly.
Pair Corralation between Franklin Templeton and T Rex
Given the investment horizon of 90 days Franklin Templeton is expected to generate 16.57 times less return on investment than T Rex. But when comparing it to its historical volatility, Franklin Templeton ETF is 6.82 times less risky than T Rex. It trades about 0.06 of its potential returns per unit of risk. T Rex 2X Long is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 249.00 in T Rex 2X Long on August 27, 2024 and sell it today you would earn a total of 1,597 from holding T Rex 2X Long or generate 641.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 56.05% |
| Values | Daily Returns |
Franklin Templeton ETF vs. T Rex 2X Long
Performance |
| Timeline |
| Franklin Templeton ETF |
| T Rex 2X |
Franklin Templeton and T Rex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and T Rex
The main advantage of trading using opposite Franklin Templeton and T Rex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, T Rex 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 T Rex will offset losses from the drop in T Rex's long position.| Franklin Templeton vs. Invesco PureBeta MSCI | Franklin Templeton vs. Aquagold International | Franklin Templeton vs. Morningstar Unconstrained Allocation | Franklin Templeton vs. High Yield Municipal Fund |
| T Rex vs. Direxion Daily SP | T Rex vs. Direxion Daily Semiconductor | T Rex vs. Direxion Daily Semiconductor |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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