Correlation Between Tidal Trust and Franklin Templeton

Can any of the company-specific risk be diversified away by investing in both Tidal 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 Tidal 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 Tidal Trust II and Franklin Templeton ETF, you can compare the effects of market volatilities on Tidal 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 Tidal Trust with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and Franklin Templeton.

Diversification Opportunities for Tidal Trust and Franklin Templeton

-0.44

Correlation Coefficient

Tidal Trust  Franklin Templeton

Very good diversification

The 3 months correlation between Tidal and Franklin is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II 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 Tidal 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 Tidal Trust II 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 Tidal Trust i.e., Tidal Trust and Franklin Templeton go up and down completely randomly.

Pair Corralation between Tidal Trust and Franklin Templeton

Given the investment horizon of 90 days Tidal Trust II is expected to under-perform the Franklin Templeton. In addition to that, Tidal Trust is 1.39 times more volatile than Franklin Templeton ETF. It trades about -0.09 of its total potential returns per unit of risk. Franklin Templeton ETF is currently generating about 0.08 per unit of volatility. If you would invest  2,658  in Franklin Templeton ETF on December 29, 2024 and sell it today you would earn a total of  106.00  from holding Franklin Templeton ETF or generate 3.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Tidal Trust II  vs.  Franklin Templeton ETF

Tidal Trust II

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tidal Trust II has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Franklin Templeton ETF

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Templeton ETF are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Franklin Templeton is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Tidal Trust and Franklin Templeton

The main advantage of trading using opposite Tidal Trust and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal 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.

The idea behind Tidal Trust II 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.