Correlation Between ProShares VIX and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both ProShares VIX 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 ProShares VIX and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares VIX Mid Term and Franklin Templeton ETF, you can compare the effects of market volatilities on ProShares VIX 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 ProShares VIX with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares VIX and Franklin Templeton.
Diversification Opportunities for ProShares VIX and Franklin Templeton
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ProShares and Franklin is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding ProShares VIX Mid Term 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 ProShares VIX 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 ProShares VIX Mid Term 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 ProShares VIX i.e., ProShares VIX and Franklin Templeton go up and down completely randomly.
Pair Corralation between ProShares VIX and Franklin Templeton
Given the investment horizon of 90 days ProShares VIX Mid Term is expected to generate 4.42 times more return on investment than Franklin Templeton. However, ProShares VIX is 4.42 times more volatile than Franklin Templeton ETF. It trades about 0.12 of its potential returns per unit of risk. Franklin Templeton ETF is currently generating about 0.17 per unit of risk. If you would invest 1,390 in ProShares VIX Mid Term on October 25, 2024 and sell it today you would earn a total of 50.00 from holding ProShares VIX Mid Term or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares VIX Mid Term vs. Franklin Templeton ETF
Performance |
| Timeline |
| ProShares VIX Mid |
| Franklin Templeton ETF |
ProShares VIX and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares VIX and Franklin Templeton
The main advantage of trading using opposite ProShares VIX and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares VIX 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.| ProShares VIX vs. iPath Series B | ProShares VIX vs. ProShares VIX Short Term | ProShares VIX vs. ProShares Short VIX | ProShares VIX vs. ProShares Ultra 20 |
| Franklin Templeton vs. First Trust Multi Asset | Franklin Templeton vs. Collaborative Investment Series | Franklin Templeton vs. Draco Evolution AI | Franklin Templeton vs. Aptus Defined Risk |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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