Correlation Between Franklin Templeton and Alpha Architect
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Alpha Architect 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 Alpha Architect 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 Alpha Architect Quantitative, you can compare the effects of market volatilities on Franklin Templeton and Alpha Architect 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 Alpha Architect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Alpha Architect.
Diversification Opportunities for Franklin Templeton and Alpha Architect
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Alpha is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and Alpha Architect Quantitative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Architect Quan 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 Alpha Architect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Architect Quan has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Alpha Architect go up and down completely randomly.
Pair Corralation between Franklin Templeton and Alpha Architect
Given the investment horizon of 90 days Franklin Templeton ETF is expected to generate 0.65 times more return on investment than Alpha Architect. However, Franklin Templeton ETF is 1.54 times less risky than Alpha Architect. It trades about 0.14 of its potential returns per unit of risk. Alpha Architect Quantitative is currently generating about 0.04 per unit of risk. If you would invest 3,088 in Franklin Templeton ETF on September 5, 2025 and sell it today you would earn a total of 240.36 from holding Franklin Templeton ETF or generate 7.78% 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. Alpha Architect Quantitative
Performance |
| Timeline |
| Franklin Templeton ETF |
| Alpha Architect Quan |
Franklin Templeton and Alpha Architect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Alpha Architect
The main advantage of trading using opposite Franklin Templeton and Alpha Architect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Alpha Architect 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 Alpha Architect will offset losses from the drop in Alpha Architect's long position.| Franklin Templeton vs. Strategy Shares | Franklin Templeton vs. Freedom Day Dividend | Franklin Templeton vs. iShares MSCI China | Franklin Templeton vs. YieldMax Short NVDA |
| Alpha Architect vs. Strategy Shares | Alpha Architect vs. Freedom Day Dividend | Alpha Architect vs. Franklin Templeton ETF | Alpha Architect vs. iShares MSCI China |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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