Correlation Between Franklin Templeton and AdvisorShares Psychedelics
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and AdvisorShares Psychedelics 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 AdvisorShares Psychedelics 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 AdvisorShares Psychedelics ETF, you can compare the effects of market volatilities on Franklin Templeton and AdvisorShares Psychedelics 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 AdvisorShares Psychedelics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and AdvisorShares Psychedelics.
Diversification Opportunities for Franklin Templeton and AdvisorShares Psychedelics
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and AdvisorShares is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and AdvisorShares Psychedelics ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Psychedelics 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 AdvisorShares Psychedelics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Psychedelics has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and AdvisorShares Psychedelics go up and down completely randomly.
Pair Corralation between Franklin Templeton and AdvisorShares Psychedelics
Given the investment horizon of 90 days Franklin Templeton is expected to generate 3.58 times less return on investment than AdvisorShares Psychedelics. But when comparing it to its historical volatility, Franklin Templeton ETF is 3.97 times less risky than AdvisorShares Psychedelics. It trades about 0.15 of its potential returns per unit of risk. AdvisorShares Psychedelics ETF is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,408 in AdvisorShares Psychedelics ETF on June 7, 2025 and sell it today you would earn a total of 328.00 from holding AdvisorShares Psychedelics ETF or generate 23.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton ETF vs. AdvisorShares Psychedelics ETF
Performance |
| Timeline |
| Franklin Templeton ETF |
| AdvisorShares Psychedelics |
Franklin Templeton and AdvisorShares Psychedelics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and AdvisorShares Psychedelics
The main advantage of trading using opposite Franklin Templeton and AdvisorShares Psychedelics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, AdvisorShares Psychedelics 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 AdvisorShares Psychedelics will offset losses from the drop in AdvisorShares Psychedelics' long position.| Franklin Templeton vs. Franklin International Core | Franklin Templeton vs. First Trust Exchange Traded | Franklin Templeton vs. Franklin Core Dividend | Franklin Templeton vs. WisdomTree Trust |
| AdvisorShares Psychedelics vs. Cybin Inc | AdvisorShares Psychedelics vs. ATAI Life Sciences | AdvisorShares Psychedelics vs. Numinus Wellness | AdvisorShares Psychedelics vs. GH Research PLC |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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