Correlation Between Franklin Templeton and SHP ETF
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and SHP 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 SHP 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 SHP ETF Trust, you can compare the effects of market volatilities on Franklin Templeton and SHP 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 SHP ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and SHP ETF.
Diversification Opportunities for Franklin Templeton and SHP ETF
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Franklin and SHP is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and SHP ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHP 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 SHP ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHP ETF Trust has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and SHP ETF go up and down completely randomly.
Pair Corralation between Franklin Templeton and SHP ETF
Given the investment horizon of 90 days Franklin Templeton ETF is expected to under-perform the SHP ETF. In addition to that, Franklin Templeton is 1.15 times more volatile than SHP ETF Trust. It trades about -0.07 of its total potential returns per unit of risk. SHP ETF Trust is currently generating about -0.03 per unit of volatility. If you would invest 4,717 in SHP ETF Trust on August 26, 2024 and sell it today you would lose (10.00) from holding SHP ETF Trust or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton ETF vs. SHP ETF Trust
Performance |
| Timeline |
| Franklin Templeton ETF |
| SHP ETF Trust |
Franklin Templeton and SHP ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and SHP ETF
The main advantage of trading using opposite Franklin Templeton and SHP ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, SHP 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 SHP ETF will offset losses from the drop in SHP ETF's long position.| Franklin Templeton vs. Franklin Liberty Investment | Franklin Templeton vs. iShares ESG Aggregate | Franklin Templeton vs. Franklin LibertyQ Equity | Franklin Templeton vs. Franklin Liberty Short |
| SHP ETF vs. Tidal Trust II | SHP ETF vs. Tidal Trust II | SHP ETF vs. First Trust Dorsey | SHP ETF vs. Direxion Daily META |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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