Correlation Between Franklin Templeton and Nuveen ESG
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Nuveen ESG 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 Nuveen ESG 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 Nuveen ESG Aggregate, you can compare the effects of market volatilities on Franklin Templeton and Nuveen ESG 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 Nuveen ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Nuveen ESG.
Diversification Opportunities for Franklin Templeton and Nuveen ESG
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Nuveen is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and Nuveen ESG Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen ESG Aggregate 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 Nuveen ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen ESG Aggregate has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Nuveen ESG go up and down completely randomly.
Pair Corralation between Franklin Templeton and Nuveen ESG
Given the investment horizon of 90 days Franklin Templeton ETF is expected to generate 0.96 times more return on investment than Nuveen ESG. However, Franklin Templeton ETF is 1.04 times less risky than Nuveen ESG. It trades about 0.02 of its potential returns per unit of risk. Nuveen ESG Aggregate is currently generating about 0.02 per unit of risk. If you would invest 2,025 in Franklin Templeton ETF on October 25, 2024 and sell it today you would earn a total of 81.00 from holding Franklin Templeton ETF or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton ETF vs. Nuveen ESG Aggregate
Performance |
| Timeline |
| Franklin Templeton ETF |
| Nuveen ESG Aggregate |
Franklin Templeton and Nuveen ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Nuveen ESG
The main advantage of trading using opposite Franklin Templeton and Nuveen ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Nuveen ESG 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 Nuveen ESG will offset losses from the drop in Nuveen ESG'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 |
| Nuveen ESG vs. NuShares Enhanced Yield | Nuveen ESG vs. NuShares ETF Trust | Nuveen ESG vs. Nuveen ESG Small Cap | Nuveen ESG vs. Nuveen ESG Large Cap |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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