diversifiable risk of combining Franklin Templeton and Listed Funds 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 Listed Funds Trust, you can compare the effects of market volatilities on Franklin Templeton and Listed Funds 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 Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Listed Funds.
Diversification Opportunities for Franklin Templeton and Listed Funds
Pair Corralation between Franklin Templeton and Listed Funds
Given the investment horizon of 90 days Franklin Templeton ETF is expected to generate 1.34 times more return on investment than Listed Funds. However, Franklin Templeton is 1.34 times more volatile than Listed Funds Trust. It trades about 0.22 of its potential returns per unit of risk. Listed Funds Trust is currently generating about 0.11 per unit of risk. If you would invest 2,439 in Franklin Templeton ETF on December 3, 2023 and sell it today you would earn a total of 93.00 from holding Franklin Templeton ETF or generate 3.81% return on investment over 90 days.
Franklin Templeton ETF vs. Listed Funds Trust
Franklin Templeton and Listed Funds Volatility Contrast
Pair Trading with Franklin Templeton and Listed FundsThe main advantage of trading using opposite Franklin Templeton and Listed Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Listed Funds 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 Listed Funds will offset losses from the drop in Listed Funds' long position. The idea behind Franklin Templeton ETF and Listed Funds 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.
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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