Correlation Between ProShares Ultra and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both ProShares Ultra and Franklin Templeton 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 ProShares Ultra and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Ultra Oil and Franklin Templeton ETF, you can compare the effects of market volatilities on ProShares Ultra and Franklin Templeton 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 ProShares Ultra with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Ultra and Franklin Templeton.
Diversification Opportunities for ProShares Ultra and Franklin Templeton
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and Franklin is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Ultra Oil and Franklin Templeton ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton ETF and ProShares Ultra 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 ProShares Ultra Oil are associated (or correlated) with Franklin Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Templeton ETF has no effect on the direction of ProShares Ultra i.e., ProShares Ultra and Franklin Templeton go up and down completely randomly.
Pair Corralation between ProShares Ultra and Franklin Templeton
Considering the 90-day investment horizon ProShares Ultra Oil is expected to generate 6.24 times more return on investment than Franklin Templeton. However, ProShares Ultra is 6.24 times more volatile than Franklin Templeton ETF. It trades about 0.24 of its potential returns per unit of risk. Franklin Templeton ETF is currently generating about 0.05 per unit of risk. If you would invest 3,943 in ProShares Ultra Oil on August 29, 2024 and sell it today you would earn a total of 503.00 from holding ProShares Ultra Oil or generate 12.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Ultra Oil vs. Franklin Templeton ETF
Performance |
| Timeline |
| ProShares Ultra Oil |
| Franklin Templeton ETF |
ProShares Ultra and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Ultra and Franklin Templeton
The main advantage of trading using opposite ProShares Ultra and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Ultra position performs unexpectedly, Franklin Templeton 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 Franklin Templeton will offset losses from the drop in Franklin Templeton's long position.| ProShares Ultra vs. ProShares UltraShort Oil | ProShares Ultra vs. ProShares Ultra Basic | ProShares Ultra vs. ProShares Ultra Financials | ProShares Ultra vs. ProShares Ultra Real |
| Franklin Templeton vs. iShares Agency Bond | Franklin Templeton vs. iShares GNMA Bond | Franklin Templeton vs. iShares JP Morgan | Franklin Templeton vs. iShares Aaa |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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