Correlation Between Xtrackers Harvest and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both Xtrackers Harvest 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 Xtrackers Harvest and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Harvest CSI and Franklin FTSE Hong, you can compare the effects of market volatilities on Xtrackers Harvest 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 Xtrackers Harvest with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Harvest and Franklin FTSE.
Diversification Opportunities for Xtrackers Harvest and Franklin FTSE
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xtrackers and Franklin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Harvest CSI and Franklin FTSE Hong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Hong and Xtrackers Harvest 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 Xtrackers Harvest CSI 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 Hong has no effect on the direction of Xtrackers Harvest i.e., Xtrackers Harvest and Franklin FTSE go up and down completely randomly.
Pair Corralation between Xtrackers Harvest and Franklin FTSE
Given the investment horizon of 90 days Xtrackers Harvest CSI is expected to generate 1.85 times more return on investment than Franklin FTSE. However, Xtrackers Harvest is 1.85 times more volatile than Franklin FTSE Hong. It trades about 0.03 of its potential returns per unit of risk. Franklin FTSE Hong is currently generating about 0.02 per unit of risk. If you would invest 2,748 in Xtrackers Harvest CSI on September 3, 2024 and sell it today you would earn a total of 172.00 from holding Xtrackers Harvest CSI or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Harvest CSI vs. Franklin FTSE Hong
Performance |
| Timeline |
| Xtrackers Harvest CSI |
| Franklin FTSE Hong |
Xtrackers Harvest and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Harvest and Franklin FTSE
The main advantage of trading using opposite Xtrackers Harvest and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Harvest 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.| Xtrackers Harvest vs. Xtrackers Harvest CSI | Xtrackers Harvest vs. Direxion Daily CSI | Xtrackers Harvest vs. iShares MSCI China | Xtrackers Harvest vs. KraneShares Bosera MSCI |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |