Correlation Between CHIK and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both CHIK 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 CHIK and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHIK and Franklin FTSE Japan, you can compare the effects of market volatilities on CHIK 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 CHIK with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHIK and Franklin FTSE.
Diversification Opportunities for CHIK and Franklin FTSE
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between CHIK and Franklin is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding CHIK and Franklin FTSE Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Japan and CHIK 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 CHIK 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 Japan has no effect on the direction of CHIK i.e., CHIK and Franklin FTSE go up and down completely randomly.
Pair Corralation between CHIK and Franklin FTSE
If you would invest 2,979 in Franklin FTSE Japan on September 4, 2024 and sell it today you would earn a total of 11.00 from holding Franklin FTSE Japan or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
CHIK vs. Franklin FTSE Japan
Performance |
| Timeline |
| CHIK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Franklin FTSE Japan |
CHIK and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHIK and Franklin FTSE
The main advantage of trading using opposite CHIK and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHIK 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.| CHIK vs. Franklin FTSE South | CHIK vs. Franklin FTSE Japan | CHIK vs. Franklin FTSE India | CHIK vs. Franklin FTSE Brazil |
| Franklin FTSE vs. JPMorgan BetaBuilders Japan | Franklin FTSE vs. Franklin FTSE South | Franklin FTSE vs. Franklin FTSE United | Franklin FTSE vs. Franklin FTSE 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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