Correlation Between ETRACS 2x and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both ETRACS 2x 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 ETRACS 2x and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETRACS 2x Leveraged and Franklin Templeton ETF, you can compare the effects of market volatilities on ETRACS 2x 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 ETRACS 2x with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETRACS 2x and Franklin Templeton.
Diversification Opportunities for ETRACS 2x and Franklin Templeton
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ETRACS and Franklin is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding ETRACS 2x Leveraged 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 ETRACS 2x 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 ETRACS 2x Leveraged 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 ETRACS 2x i.e., ETRACS 2x and Franklin Templeton go up and down completely randomly.
Pair Corralation between ETRACS 2x and Franklin Templeton
Given the investment horizon of 90 days ETRACS 2x Leveraged is expected to generate 1.48 times more return on investment than Franklin Templeton. However, ETRACS 2x is 1.48 times more volatile than Franklin Templeton ETF. It trades about 0.27 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 4,085 in ETRACS 2x Leveraged on August 30, 2024 and sell it today you would earn a total of 376.00 from holding ETRACS 2x Leveraged or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ETRACS 2x Leveraged vs. Franklin Templeton ETF
Performance |
| Timeline |
| ETRACS 2x Leveraged |
| Franklin Templeton ETF |
ETRACS 2x and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETRACS 2x and Franklin Templeton
The main advantage of trading using opposite ETRACS 2x and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETRACS 2x 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.| ETRACS 2x vs. ABIVAX Socit Anonyme | ETRACS 2x vs. Morningstar Unconstrained Allocation | ETRACS 2x vs. SPACE | ETRACS 2x vs. Knife River |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |