Correlation Between Franklin Templeton and Global X
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton 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 Templeton 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 Templeton ETF and Global X SP, you can compare the effects of market volatilities on Franklin Templeton 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 Templeton with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Global X.
Diversification Opportunities for Franklin Templeton and Global X
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Global is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and Global X SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SP 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 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 SP has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Global X go up and down completely randomly.
Pair Corralation between Franklin Templeton and Global X
Given the investment horizon of 90 days Franklin Templeton is expected to generate 2.49 times less return on investment than Global X. In addition to that, Franklin Templeton is 1.46 times more volatile than Global X SP. It trades about 0.04 of its total potential returns per unit of risk. Global X SP is currently generating about 0.14 per unit of volatility. If you would invest 2,972 in Global X SP on September 1, 2024 and sell it today you would earn a total of 408.00 from holding Global X SP or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Franklin Templeton ETF vs. Global X SP
Performance |
| Timeline |
| Franklin Templeton ETF |
| Global X SP |
Franklin Templeton and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Global X
The main advantage of trading using opposite Franklin Templeton and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton 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 Templeton vs. Xtrackers MSCI Emerging | Franklin Templeton vs. FlexShares Morningstar Emerging | Franklin Templeton vs. First Trust Emerging |
| Global X vs. Core Alternative ETF | Global X vs. Invesco SP 500 | Global X vs. ETF Series Solutions | Global X vs. WisdomTree Target Range |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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