Correlation Between IShares Treasury and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both IShares Treasury 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 IShares Treasury and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Treasury Floating and Franklin Templeton ETF, you can compare the effects of market volatilities on IShares Treasury 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 IShares Treasury with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Treasury and Franklin Templeton.
Diversification Opportunities for IShares Treasury and Franklin Templeton
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and Franklin is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding iShares Treasury Floating 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 IShares Treasury 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 iShares Treasury Floating 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 IShares Treasury i.e., IShares Treasury and Franklin Templeton go up and down completely randomly.
Pair Corralation between IShares Treasury and Franklin Templeton
Given the investment horizon of 90 days iShares Treasury Floating is expected to generate 0.03 times more return on investment than Franklin Templeton. However, iShares Treasury Floating is 31.48 times less risky than Franklin Templeton. It trades about 0.81 of its potential returns per unit of risk. Franklin Templeton ETF is currently generating about -0.03 per unit of risk. If you would invest 5,041 in iShares Treasury Floating on October 21, 2024 and sell it today you would earn a total of 18.00 from holding iShares Treasury Floating or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Treasury Floating vs. Franklin Templeton ETF
Performance |
| Timeline |
| iShares Treasury Floating |
| Franklin Templeton ETF |
IShares Treasury and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Treasury and Franklin Templeton
The main advantage of trading using opposite IShares Treasury and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Treasury 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.| IShares Treasury vs. WisdomTree Floating Rate | IShares Treasury vs. iShares 0 3 Month | IShares Treasury vs. iShares Ultra Short Term | IShares Treasury vs. iShares Floating Rate |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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