Correlation Between Esoterica NextG and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both Esoterica NextG 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 Esoterica NextG and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esoterica NextG Economy and Franklin Templeton ETF, you can compare the effects of market volatilities on Esoterica NextG 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 Esoterica NextG with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esoterica NextG and Franklin Templeton.
Diversification Opportunities for Esoterica NextG and Franklin Templeton
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Esoterica and Franklin is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Esoterica NextG Economy 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 Esoterica NextG 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 Esoterica NextG Economy 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 Esoterica NextG i.e., Esoterica NextG and Franklin Templeton go up and down completely randomly.
Pair Corralation between Esoterica NextG and Franklin Templeton
Given the investment horizon of 90 days Esoterica NextG is expected to generate 2.49 times less return on investment than Franklin Templeton. In addition to that, Esoterica NextG is 1.12 times more volatile than Franklin Templeton ETF. It trades about 0.08 of its total potential returns per unit of risk. Franklin Templeton ETF is currently generating about 0.22 per unit of volatility. If you would invest 6,358 in Franklin Templeton ETF on August 25, 2024 and sell it today you would earn a total of 416.00 from holding Franklin Templeton ETF or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esoterica NextG Economy vs. Franklin Templeton ETF
Performance |
| Timeline |
| Esoterica NextG Economy |
| Franklin Templeton ETF |
Esoterica NextG and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esoterica NextG and Franklin Templeton
The main advantage of trading using opposite Esoterica NextG and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esoterica NextG 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.| Esoterica NextG vs. First Trust NASDAQ | Esoterica NextG vs. Franklin Disruptive Commerce | Esoterica NextG vs. TrueShares Technology AI | Esoterica NextG vs. Innovator Loup Frontier |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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