Correlation Between Leverage Shares and Franklin LibertyQ
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and Franklin LibertyQ 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 Leverage Shares and Franklin LibertyQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 2x and Franklin LibertyQ Global, you can compare the effects of market volatilities on Leverage Shares and Franklin LibertyQ 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 Leverage Shares with a short position of Franklin LibertyQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and Franklin LibertyQ.
Diversification Opportunities for Leverage Shares and Franklin LibertyQ
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Leverage and Franklin is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 2x and Franklin LibertyQ Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin LibertyQ Global and Leverage 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 Leverage Shares 2x are associated (or correlated) with Franklin LibertyQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin LibertyQ Global has no effect on the direction of Leverage Shares i.e., Leverage Shares and Franklin LibertyQ go up and down completely randomly.
Pair Corralation between Leverage Shares and Franklin LibertyQ
Assuming the 90 days trading horizon Leverage Shares is expected to generate 14.18 times less return on investment than Franklin LibertyQ. In addition to that, Leverage Shares is 4.6 times more volatile than Franklin LibertyQ Global. It trades about 0.0 of its total potential returns per unit of risk. Franklin LibertyQ Global is currently generating about 0.27 per unit of volatility. If you would invest 2,787 in Franklin LibertyQ Global on September 5, 2024 and sell it today you would earn a total of 143.00 from holding Franklin LibertyQ Global or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Leverage Shares 2x vs. Franklin LibertyQ Global
Performance |
| Timeline |
| Leverage Shares 2x |
| Franklin LibertyQ Global |
Leverage Shares and Franklin LibertyQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and Franklin LibertyQ
The main advantage of trading using opposite Leverage Shares and Franklin LibertyQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, Franklin LibertyQ 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 LibertyQ will offset losses from the drop in Franklin LibertyQ's long position.| Leverage Shares vs. Vanguard FTSE Developed | Leverage Shares vs. Amundi Index Solutions | Leverage Shares vs. Amundi Index Solutions | Leverage Shares vs. Albion Venture Capital |
| Franklin LibertyQ vs. WisdomTree Natural Gas | Franklin LibertyQ vs. WisdomTree Natural Gas | Franklin LibertyQ vs. Leverage Shares 2x | Franklin LibertyQ vs. WisdomTree Silver 3x |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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