Correlation Between Strategy Shares and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both Strategy Shares 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 Strategy Shares and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategy Shares Nasdaq and Franklin Templeton ETF, you can compare the effects of market volatilities on Strategy Shares 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 Strategy Shares with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategy Shares and Franklin Templeton.
Diversification Opportunities for Strategy Shares and Franklin Templeton
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Strategy and Franklin is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Strategy Shares Nasdaq 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 Strategy Shares 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 Strategy Shares 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 ETF has no effect on the direction of Strategy Shares i.e., Strategy Shares and Franklin Templeton go up and down completely randomly.
Pair Corralation between Strategy Shares and Franklin Templeton
Given the investment horizon of 90 days Strategy Shares Nasdaq is expected to generate 1.72 times more return on investment than Franklin Templeton. However, Strategy Shares is 1.72 times more volatile than Franklin Templeton ETF. It trades about 0.1 of its potential returns per unit of risk. Franklin Templeton ETF is currently generating about -0.04 per unit of risk. If you would invest 2,201 in Strategy Shares Nasdaq on September 12, 2024 and sell it today you would earn a total of 21.00 from holding Strategy Shares Nasdaq or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategy Shares Nasdaq vs. Franklin Templeton ETF
Performance |
| Timeline |
| Strategy Shares Nasdaq |
| Franklin Templeton ETF |
Strategy Shares and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategy Shares and Franklin Templeton
The main advantage of trading using opposite Strategy Shares and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategy Shares 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.| Strategy Shares vs. NEOS ETF Trust | Strategy Shares vs. First Trust Multi Asset | Strategy Shares vs. Amplify High Income | Strategy Shares vs. Global X Russell |
| Franklin Templeton vs. First Trust Multi Asset | Franklin Templeton vs. Collaborative Investment Series | Franklin Templeton vs. EA Series Trust | Franklin Templeton vs. Aptus Defined Risk |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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