Correlation Between Franklin Templeton and Franklin Exponential
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Franklin Exponential 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 Franklin Exponential 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 Franklin Exponential Data, you can compare the effects of market volatilities on Franklin Templeton and Franklin Exponential 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 Franklin Exponential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Franklin Exponential.
Diversification Opportunities for Franklin Templeton and Franklin Exponential
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Franklin is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and Franklin Exponential Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Exponential Data 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 Franklin Exponential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Exponential Data has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Franklin Exponential go up and down completely randomly.
Pair Corralation between Franklin Templeton and Franklin Exponential
Considering the 90-day investment horizon Franklin Templeton ETF is expected to under-perform the Franklin Exponential. In addition to that, Franklin Templeton is 1.31 times more volatile than Franklin Exponential Data. It trades about -0.11 of its total potential returns per unit of risk. Franklin Exponential Data is currently generating about -0.09 per unit of volatility. If you would invest 2,561 in Franklin Exponential Data on December 29, 2024 and sell it today you would lose (240.00) from holding Franklin Exponential Data or give up 9.37% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Franklin Templeton ETF vs. Franklin Exponential Data
Performance |
Timeline |
Franklin Templeton ETF |
Franklin Exponential Data |
Franklin Templeton and Franklin Exponential Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin Templeton and Franklin Exponential
The main advantage of trading using opposite Franklin Templeton and Franklin Exponential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Franklin Exponential 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 Exponential will offset losses from the drop in Franklin Exponential's long position.Franklin Templeton vs. Vanguard Information Technology | Franklin Templeton vs. Technology Select Sector | Franklin Templeton vs. iShares Technology ETF | Franklin Templeton vs. VanEck Semiconductor ETF |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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