Correlation Between NYSE Composite and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Franklin Templeton ETF, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Franklin Templeton.
Diversification Opportunities for NYSE Composite and Franklin Templeton
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Franklin is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Franklin Templeton go up and down completely randomly.
Pair Corralation between NYSE Composite and Franklin Templeton
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.74 times less return on investment than Franklin Templeton. But when comparing it to its historical volatility, NYSE Composite is 1.13 times less risky than Franklin Templeton. It trades about 0.08 of its potential returns per unit of risk. Franklin Templeton ETF is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,386 in Franklin Templeton ETF on November 9, 2024 and sell it today you would earn a total of 1,943 from holding Franklin Templeton ETF or generate 57.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Franklin Templeton ETF
Performance |
| Timeline |
NYSE Composite and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Franklin Templeton ETF
Pair trading matchups for Franklin Templeton
Pair Trading with NYSE Composite and Franklin Templeton
The main advantage of trading using opposite NYSE Composite and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Integrated Media Technology | NYSE Composite vs. Custom Truck One | NYSE Composite vs. Funko Inc | NYSE Composite vs. Multi Ways Holdings |
| Franklin Templeton vs. Franklin Core Dividend | Franklin Templeton vs. WisdomTree Multifactor | Franklin Templeton vs. American Century STOXX | Franklin Templeton vs. Vanguard Quality Factor |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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