Correlation Between Franklin Templeton and Macquarie ETF

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

Diversification Opportunities for Franklin Templeton and Macquarie ETF

0.58

Correlation Coefficient

Franklin Templeton  Macquarie ETF

Very weak diversification

The 3 months correlation between Franklin and Macquarie is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and Macquarie ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie ETF Trust 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 Macquarie ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie ETF Trust has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Macquarie ETF go up and down completely randomly.

Pair Corralation between Franklin Templeton and Macquarie ETF

Given the investment horizon of 90 days Franklin Templeton is expected to generate 1.48 times less return on investment than Macquarie ETF. In addition to that, Franklin Templeton is 1.1 times more volatile than Macquarie ETF Trust. It trades about 0.06 of its total potential returns per unit of risk. Macquarie ETF Trust is currently generating about 0.09 per unit of volatility. If you would invest  2,660  in Macquarie ETF Trust on September 12, 2024 and sell it today you would earn a total of  169.00  from holding Macquarie ETF Trust or generate 6.35% return on investment over 90 days.

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

Franklin Templeton ETF  vs.  Macquarie ETF Trust

Franklin Templeton ETF

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Templeton ETF are ranked lower than 4 (%) 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.

Macquarie ETF Trust

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Macquarie ETF Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Macquarie ETF may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Franklin Templeton and Macquarie ETF

The main advantage of trading using opposite Franklin Templeton and Macquarie ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Macquarie ETF 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 Macquarie ETF will offset losses from the drop in Macquarie ETF's long position.

The idea behind Franklin Templeton ETF and Macquarie ETF Trust 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.