Correlation Between UBS AG and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both UBS AG 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 UBS AG and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS AG London and Franklin Templeton ETF, you can compare the effects of market volatilities on UBS AG 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 UBS AG with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS AG and Franklin Templeton.
Diversification Opportunities for UBS AG and Franklin Templeton
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UBS and Franklin is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding UBS AG London 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 UBS AG 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 UBS AG London 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 UBS AG i.e., UBS AG and Franklin Templeton go up and down completely randomly.
Pair Corralation between UBS AG and Franklin Templeton
If you would invest 3,815 in UBS AG London on October 21, 2024 and sell it today you would earn a total of 0.00 from holding UBS AG London or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
UBS AG London vs. Franklin Templeton ETF
Performance |
| Timeline |
| UBS AG London |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Franklin Templeton ETF |
UBS AG and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS AG and Franklin Templeton
The main advantage of trading using opposite UBS AG and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS AG 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.The idea behind UBS AG London and Franklin Templeton ETF pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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