Correlation Between WisdomTree Trust and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both WisdomTree Trust 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 WisdomTree Trust and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Trust and Franklin Templeton ETF, you can compare the effects of market volatilities on WisdomTree Trust 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 WisdomTree Trust with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Trust and Franklin Templeton.
Diversification Opportunities for WisdomTree Trust and Franklin Templeton
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WisdomTree and Franklin is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Trust 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 WisdomTree Trust 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 WisdomTree Trust 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 WisdomTree Trust i.e., WisdomTree Trust and Franklin Templeton go up and down completely randomly.
Pair Corralation between WisdomTree Trust and Franklin Templeton
Considering the 90-day investment horizon WisdomTree Trust is expected to generate 0.99 times more return on investment than Franklin Templeton. However, WisdomTree Trust is 1.01 times less risky than Franklin Templeton. It trades about 0.25 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 8,373 in WisdomTree Trust on October 21, 2024 and sell it today you would earn a total of 285.00 from holding WisdomTree Trust or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Trust vs. Franklin Templeton ETF
Performance |
| Timeline |
| WisdomTree Trust |
| Franklin Templeton ETF |
WisdomTree Trust and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Trust and Franklin Templeton
The main advantage of trading using opposite WisdomTree Trust and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Trust 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.| WisdomTree Trust vs. Invesco SP MidCap | WisdomTree Trust vs. Invesco SP MidCap | WisdomTree Trust vs. Invesco SP 500 | WisdomTree Trust vs. Vanguard Value Factor |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |