Correlation Between Franklin Templeton and PGIM ETF
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and PGIM ETF 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 PGIM ETF 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 PGIM ETF Trust, you can compare the effects of market volatilities on Franklin Templeton and PGIM ETF 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 PGIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and PGIM ETF.
Diversification Opportunities for Franklin Templeton and PGIM ETF
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and PGIM is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and PGIM ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM ETF Trust 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 PGIM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM ETF Trust has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and PGIM ETF go up and down completely randomly.
Pair Corralation between Franklin Templeton and PGIM ETF
Given the investment horizon of 90 days Franklin Templeton is expected to generate 2.07 times less return on investment than PGIM ETF. But when comparing it to its historical volatility, Franklin Templeton ETF is 1.68 times less risky than PGIM ETF. It trades about 0.1 of its potential returns per unit of risk. PGIM ETF Trust is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6,104 in PGIM ETF Trust on November 9, 2024 and sell it today you would earn a total of 222.00 from holding PGIM ETF Trust or generate 3.64% 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. PGIM ETF Trust
Performance |
| Timeline |
| Franklin Templeton ETF |
| PGIM ETF Trust |
Franklin Templeton and PGIM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and PGIM ETF
The main advantage of trading using opposite Franklin Templeton and PGIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, PGIM ETF 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 PGIM ETF will offset losses from the drop in PGIM ETF'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 |
| PGIM ETF vs. Freedom Day Dividend | PGIM ETF vs. Franklin Templeton ETF | PGIM ETF vs. iShares MSCI China | PGIM ETF 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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