Correlation Between Franklin Disruptive and Global X
Can any of the company-specific risk be diversified away by investing in both Franklin Disruptive and Global X 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 Disruptive and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Disruptive Commerce and Global X Thematic, you can compare the effects of market volatilities on Franklin Disruptive and Global X 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 Disruptive with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Disruptive and Global X.
Diversification Opportunities for Franklin Disruptive and Global X
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Global is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Disruptive Commerce and Global X Thematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Thematic and Franklin Disruptive 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 Disruptive Commerce are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Thematic has no effect on the direction of Franklin Disruptive i.e., Franklin Disruptive and Global X go up and down completely randomly.
Pair Corralation between Franklin Disruptive and Global X
Given the investment horizon of 90 days Franklin Disruptive Commerce is expected to under-perform the Global X. In addition to that, Franklin Disruptive is 1.3 times more volatile than Global X Thematic. It trades about -0.05 of its total potential returns per unit of risk. Global X Thematic is currently generating about 0.11 per unit of volatility. If you would invest 2,394 in Global X Thematic on November 28, 2024 and sell it today you would earn a total of 45.00 from holding Global X Thematic or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Disruptive Commerce vs. Global X Thematic
Performance |
| Timeline |
| Franklin Disruptive |
| Global X Thematic |
Franklin Disruptive and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Disruptive and Global X
The main advantage of trading using opposite Franklin Disruptive and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Disruptive position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Franklin Disruptive vs. Franklin Templeton ETF | Franklin Disruptive vs. TrueShares Technology AI | Franklin Disruptive vs. Franklin Exponential Data | Franklin Disruptive vs. Franklin Genomic Advancements |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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