Correlation Between First Trust/confluence and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both First Trust/confluence 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 First Trust/confluence and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trustconfluence Small and Franklin Templeton Multi Asset, you can compare the effects of market volatilities on First Trust/confluence 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 First Trust/confluence with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust/confluence and Franklin Templeton.
Diversification Opportunities for First Trust/confluence and Franklin Templeton
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Franklin is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding First Trustconfluence Small and Franklin Templeton Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton and First Trust/confluence 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 First Trustconfluence Small 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 has no effect on the direction of First Trust/confluence i.e., First Trust/confluence and Franklin Templeton go up and down completely randomly.
Pair Corralation between First Trust/confluence and Franklin Templeton
Assuming the 90 days horizon First Trustconfluence Small is expected to under-perform the Franklin Templeton. In addition to that, First Trust/confluence is 5.4 times more volatile than Franklin Templeton Multi Asset. It trades about -0.08 of its total potential returns per unit of risk. Franklin Templeton Multi Asset is currently generating about -0.01 per unit of volatility. If you would invest 2,359 in Franklin Templeton Multi Asset on December 29, 2024 and sell it today you would lose (2.00) from holding Franklin Templeton Multi Asset or give up 0.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
First Trustconfluence Small vs. Franklin Templeton Multi Asset
Performance |
Timeline |
First Trust/confluence |
Franklin Templeton |
First Trust/confluence and Franklin Templeton Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Trust/confluence and Franklin Templeton
The main advantage of trading using opposite First Trust/confluence and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust/confluence 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.First Trust/confluence vs. The Hartford Healthcare | First Trust/confluence vs. Deutsche Health And | First Trust/confluence vs. Blackrock Health Sciences | First Trust/confluence vs. Baillie Gifford Health |
Franklin Templeton vs. Goldman Sachs Financial | Franklin Templeton vs. Mesirow Financial Small | Franklin Templeton vs. 1919 Financial Services | Franklin Templeton vs. Rmb Mendon Financial |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum |