Correlation Between Franklin Templeton and Sprott Nickel
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Sprott Nickel 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 Franklin Templeton and Sprott Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton ETF and Sprott Nickel Miners, you can compare the effects of market volatilities on Franklin Templeton and Sprott Nickel 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 Franklin Templeton with a short position of Sprott Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Sprott Nickel.
Diversification Opportunities for Franklin Templeton and Sprott Nickel
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Sprott is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and Sprott Nickel Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Nickel Miners and Franklin Templeton 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 Franklin Templeton ETF are associated (or correlated) with Sprott Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Nickel Miners has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Sprott Nickel go up and down completely randomly.
Pair Corralation between Franklin Templeton and Sprott Nickel
Given the investment horizon of 90 days Franklin Templeton ETF is expected to generate 0.51 times more return on investment than Sprott Nickel. However, Franklin Templeton ETF is 1.98 times less risky than Sprott Nickel. It trades about 0.04 of its potential returns per unit of risk. Sprott Nickel Miners is currently generating about -0.14 per unit of risk. If you would invest 2,658 in Franklin Templeton ETF on December 28, 2024 and sell it today you would earn a total of 57.19 from holding Franklin Templeton ETF or generate 2.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Templeton ETF vs. Sprott Nickel Miners
Performance |
Timeline |
Franklin Templeton ETF |
Sprott Nickel Miners |
Franklin Templeton and Sprott Nickel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Templeton and Sprott Nickel
The main advantage of trading using opposite Franklin Templeton and Sprott Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Sprott Nickel 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 Sprott Nickel will offset losses from the drop in Sprott Nickel's long position.Franklin Templeton vs. Franklin International Core | Franklin Templeton vs. WisdomTree Trust | Franklin Templeton vs. First Trust Exchange Traded |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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