Correlation Between Aquagold International and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both Aquagold International and Franklin FTSE 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 Aquagold International and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and Franklin FTSE China, you can compare the effects of market volatilities on Aquagold International and Franklin FTSE 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 Aquagold International with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Franklin FTSE.
Diversification Opportunities for Aquagold International and Franklin FTSE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aquagold and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Franklin FTSE China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE China and Aquagold International 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 Aquagold International are associated (or correlated) with Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE China has no effect on the direction of Aquagold International i.e., Aquagold International and Franklin FTSE go up and down completely randomly.
Pair Corralation between Aquagold International and Franklin FTSE
Given the investment horizon of 90 days Aquagold International is expected to generate 28.68 times more return on investment than Franklin FTSE. However, Aquagold International is 28.68 times more volatile than Franklin FTSE China. It trades about 0.06 of its potential returns per unit of risk. Franklin FTSE China is currently generating about 0.01 per unit of risk. If you would invest 25.00 in Aquagold International on September 3, 2024 and sell it today you would lose (24.40) from holding Aquagold International or give up 97.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquagold International vs. Franklin FTSE China
Performance |
| Timeline |
| Aquagold International |
| Franklin FTSE China |
Aquagold International and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquagold International and Franklin FTSE
The main advantage of trading using opposite Aquagold International and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, Franklin FTSE 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 FTSE will offset losses from the drop in Franklin FTSE's long position.| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
| Franklin FTSE vs. Franklin FTSE South | Franklin FTSE vs. Franklin FTSE Japan | Franklin FTSE vs. Franklin FTSE India | Franklin FTSE vs. Franklin FTSE Brazil |
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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