Correlation Between Franklin Templeton and Robo Global
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Robo Global 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 Robo Global 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 Robo Global Artificial, you can compare the effects of market volatilities on Franklin Templeton and Robo Global 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 Robo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Robo Global.
Diversification Opportunities for Franklin Templeton and Robo Global
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Robo is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and Robo Global Artificial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robo Global Artificial 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 Robo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robo Global Artificial has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Robo Global go up and down completely randomly.
Pair Corralation between Franklin Templeton and Robo Global
Considering the 90-day investment horizon Franklin Templeton ETF is expected to generate 1.24 times more return on investment than Robo Global. However, Franklin Templeton is 1.24 times more volatile than Robo Global Artificial. It trades about 0.06 of its potential returns per unit of risk. Robo Global Artificial is currently generating about 0.06 per unit of risk. If you would invest 5,736 in Franklin Templeton ETF on September 1, 2024 and sell it today you would earn a total of 1,024 from holding Franklin Templeton ETF or generate 17.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Franklin Templeton ETF vs. Robo Global Artificial
Performance |
| Timeline |
| Franklin Templeton ETF |
| Robo Global Artificial |
Franklin Templeton and Robo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Robo Global
The main advantage of trading using opposite Franklin Templeton and Robo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Robo Global 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 Robo Global will offset losses from the drop in Robo Global's long position.The idea behind Franklin Templeton ETF and Robo Global Artificial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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