Correlation Between Virtus WMC and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both Virtus WMC 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 Virtus WMC and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus WMC International and Franklin Templeton ETF, you can compare the effects of market volatilities on Virtus WMC 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 Virtus WMC with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus WMC and Franklin Templeton.
Diversification Opportunities for Virtus WMC and Franklin Templeton
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtus and Franklin is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Virtus WMC International 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 Virtus WMC 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 Virtus WMC International 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 Virtus WMC i.e., Virtus WMC and Franklin Templeton go up and down completely randomly.
Pair Corralation between Virtus WMC and Franklin Templeton
Given the investment horizon of 90 days Virtus WMC International is expected to generate 0.81 times more return on investment than Franklin Templeton. However, Virtus WMC International is 1.23 times less risky than Franklin Templeton. It trades about 0.27 of its potential returns per unit of risk. Franklin Templeton ETF is currently generating about -0.02 per unit of risk. If you would invest 2,648 in Virtus WMC International on October 24, 2024 and sell it today you would earn a total of 79.00 from holding Virtus WMC International or generate 2.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus WMC International vs. Franklin Templeton ETF
Performance |
| Timeline |
| Virtus WMC International |
| Franklin Templeton ETF |
Virtus WMC and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus WMC and Franklin Templeton
The main advantage of trading using opposite Virtus WMC and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus WMC 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.| Virtus WMC vs. Franklin Templeton ETF | Virtus WMC vs. Altrius Global Dividend | Virtus WMC vs. Invesco Exchange Traded | Virtus WMC vs. Franklin International Core |
| 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stocks Directory Find actively traded stocks across global markets |