Correlation Between Franklin Templeton and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Tidal Trust 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 Tidal Trust 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 Tidal Trust II, you can compare the effects of market volatilities on Franklin Templeton and Tidal Trust 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 Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Tidal Trust.
Diversification Opportunities for Franklin Templeton and Tidal Trust
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Tidal is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and Tidal Trust II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust II 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 Tidal Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal Trust II has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Tidal Trust go up and down completely randomly.
Pair Corralation between Franklin Templeton and Tidal Trust
Given the investment horizon of 90 days Franklin Templeton ETF is expected to under-perform the Tidal Trust. In addition to that, Franklin Templeton is 1.57 times more volatile than Tidal Trust II. It trades about -0.05 of its total potential returns per unit of risk. Tidal Trust II is currently generating about 0.35 per unit of volatility. If you would invest 1,930 in Tidal Trust II on September 1, 2024 and sell it today you would earn a total of 98.00 from holding Tidal Trust II or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Templeton ETF vs. Tidal Trust II
Performance |
| Timeline |
| Franklin Templeton ETF |
| Tidal Trust II |
Franklin Templeton and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Tidal Trust
The main advantage of trading using opposite Franklin Templeton and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Tidal Trust 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 Tidal Trust will offset losses from the drop in Tidal Trust's long position.| Franklin Templeton vs. Xtrackers MSCI Emerging | Franklin Templeton vs. FlexShares Morningstar Emerging | Franklin Templeton vs. First Trust Emerging |
| Tidal Trust vs. Freedom Day Dividend | Tidal Trust vs. iShares MSCI China | Tidal Trust vs. iShares Dividend and | Tidal Trust vs. SmartETFs Dividend Builder |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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