Correlation Between First Trust and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both First Trust 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 First Trust and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Nasdaq and Franklin Templeton Investments, you can compare the effects of market volatilities on First Trust 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 First Trust with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Franklin Templeton.
Diversification Opportunities for First Trust and Franklin Templeton
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Franklin is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Nasdaq and Franklin Templeton Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton and First Trust 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 First Trust Nasdaq 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 has no effect on the direction of First Trust i.e., First Trust and Franklin Templeton go up and down completely randomly.
Pair Corralation between First Trust and Franklin Templeton
If you would invest 3,091 in First Trust Nasdaq on August 31, 2024 and sell it today you would earn a total of 400.00 from holding First Trust Nasdaq or generate 12.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
First Trust Nasdaq vs. Franklin Templeton Investments
Performance |
| Timeline |
| First Trust Nasdaq |
| Franklin Templeton |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Trust and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Franklin Templeton
The main advantage of trading using opposite First Trust and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust 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.| First Trust vs. First Trust NASDAQ | First Trust vs. First Trust Nasdaq | First Trust vs. First Trust Nasdaq | First Trust vs. Invesco KBW Regional |
| Franklin Templeton vs. Vanguard Growth Index | Franklin Templeton vs. iShares Russell 1000 | Franklin Templeton vs. iShares SP 500 | Franklin Templeton vs. iShares Core SP |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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