Correlation Between KraneShares Trust and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both KraneShares 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 KraneShares 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 KraneShares Trust and Franklin Templeton ETF, you can compare the effects of market volatilities on KraneShares 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 KraneShares Trust with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares Trust and Franklin Templeton.
Diversification Opportunities for KraneShares Trust and Franklin Templeton
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KraneShares and Franklin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Trust 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 KraneShares 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 KraneShares Trust 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 KraneShares Trust i.e., KraneShares Trust and Franklin Templeton go up and down completely randomly.
Pair Corralation between KraneShares Trust and Franklin Templeton
Given the investment horizon of 90 days KraneShares Trust is expected to generate 0.48 times more return on investment than Franklin Templeton. However, KraneShares Trust is 2.07 times less risky than Franklin Templeton. It trades about -0.02 of its potential returns per unit of risk. Franklin Templeton ETF is currently generating about -0.14 per unit of risk. If you would invest 2,730 in KraneShares Trust on August 30, 2024 and sell it today you would lose (6.00) from holding KraneShares Trust or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KraneShares Trust vs. Franklin Templeton ETF
Performance |
| Timeline |
| KraneShares Trust |
| Franklin Templeton ETF |
KraneShares Trust and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KraneShares Trust and Franklin Templeton
The main advantage of trading using opposite KraneShares Trust and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares 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.| KraneShares Trust vs. Freedom Day Dividend | KraneShares Trust vs. Franklin Templeton ETF | KraneShares Trust vs. iShares MSCI China | KraneShares Trust vs. Tidal Trust II |
| Franklin Templeton vs. Franklin Core Dividend | Franklin Templeton vs. Franklin International Core | Franklin Templeton vs. WisdomTree Trust | Franklin Templeton vs. First Trust Exchange Traded |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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