Correlation Between Franklin Templeton and Putnam ETF
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Putnam 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 Putnam 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 Putnam ETF Trust, you can compare the effects of market volatilities on Franklin Templeton and Putnam 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 Putnam ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Putnam ETF.
Diversification Opportunities for Franklin Templeton and Putnam ETF
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Franklin and Putnam is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and Putnam ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam 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 Putnam ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam ETF Trust has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Putnam ETF go up and down completely randomly.
Pair Corralation between Franklin Templeton and Putnam ETF
Given the investment horizon of 90 days Franklin Templeton ETF is expected to generate 0.85 times more return on investment than Putnam ETF. However, Franklin Templeton ETF is 1.17 times less risky than Putnam ETF. It trades about 0.05 of its potential returns per unit of risk. Putnam ETF Trust is currently generating about 0.03 per unit of risk. If you would invest 2,133 in Franklin Templeton ETF on August 29, 2024 and sell it today you would earn a total of 9.00 from holding Franklin Templeton ETF or generate 0.42% 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. Putnam ETF Trust
Performance |
| Timeline |
| Franklin Templeton ETF |
| Putnam ETF Trust |
Franklin Templeton and Putnam ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Putnam ETF
The main advantage of trading using opposite Franklin Templeton and Putnam ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Putnam 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 Putnam ETF will offset losses from the drop in Putnam ETF's long position.| Franklin Templeton vs. iShares Agency Bond | Franklin Templeton vs. iShares GNMA Bond | Franklin Templeton vs. iShares JP Morgan | Franklin Templeton vs. iShares Aaa |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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