Correlation Between ProShares UltraShort and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both ProShares UltraShort 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 ProShares UltraShort and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares UltraShort Bloomberg and Franklin Templeton Investments, you can compare the effects of market volatilities on ProShares UltraShort 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 ProShares UltraShort with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares UltraShort and Franklin Templeton.
Diversification Opportunities for ProShares UltraShort and Franklin Templeton
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ProShares UltraShort Bloomberg and Franklin Templeton Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton and ProShares UltraShort 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 ProShares UltraShort Bloomberg 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 ProShares UltraShort i.e., ProShares UltraShort and Franklin Templeton go up and down completely randomly.
Pair Corralation between ProShares UltraShort and Franklin Templeton
If you would invest (100.00) in Franklin Templeton Investments on January 25, 2024 and sell it today you would earn a total of 100.00 from holding Franklin Templeton Investments or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
ProShares UltraShort Bloomberg vs. Franklin Templeton Investments
Performance |
| Timeline |
| ProShares UltraShort |
| Franklin Templeton |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProShares UltraShort and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares UltraShort and Franklin Templeton
The main advantage of trading using opposite ProShares UltraShort and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares UltraShort 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 ProShares UltraShort Bloomberg and Franklin Templeton Investments 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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