Correlation Between Franklin International and Global X
Can any of the company-specific risk be diversified away by investing in both Franklin International 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 International 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 International Core and Global X MSCI, you can compare the effects of market volatilities on Franklin International 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 International with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin International and Global X.
Diversification Opportunities for Franklin International and Global X
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Global is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Franklin International Core and Global X MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X MSCI and Franklin 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 Franklin International Core 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 MSCI has no effect on the direction of Franklin International i.e., Franklin International and Global X go up and down completely randomly.
Pair Corralation between Franklin International and Global X
Given the investment horizon of 90 days Franklin International Core is expected to generate 0.9 times more return on investment than Global X. However, Franklin International Core is 1.11 times less risky than Global X. It trades about 0.22 of its potential returns per unit of risk. Global X MSCI is currently generating about 0.07 per unit of risk. If you would invest 2,981 in Franklin International Core on October 21, 2024 and sell it today you would earn a total of 73.00 from holding Franklin International Core or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin International Core vs. Global X MSCI
Performance |
| Timeline |
| Franklin International |
| Global X MSCI |
Franklin International and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin International and Global X
The main advantage of trading using opposite Franklin International and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin International 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.The idea behind Franklin International Core and Global X MSCI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Global X vs. Global X MSCI | Global X vs. Global X Alternative | Global X vs. iShares Emerging Markets | Global X vs. Global X SuperDividend |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |