Correlation Between DSJA and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both DSJA 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 DSJA and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSJA and Franklin FTSE Japan, you can compare the effects of market volatilities on DSJA 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 DSJA with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSJA and Franklin FTSE.
Diversification Opportunities for DSJA and Franklin FTSE
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DSJA and Franklin is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding DSJA 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 DSJA 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 DSJA 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 DSJA i.e., DSJA and Franklin FTSE go up and down completely randomly.
Pair Corralation between DSJA and Franklin FTSE
If you would invest 2,886 in Franklin FTSE Japan on September 1, 2024 and sell it today you would earn a total of 70.00 from holding Franklin FTSE Japan or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
DSJA vs. Franklin FTSE Japan
Performance |
| Timeline |
| DSJA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Franklin FTSE Japan |
DSJA and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSJA and Franklin FTSE
The main advantage of trading using opposite DSJA and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSJA 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.The idea behind DSJA and Franklin FTSE Japan 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.| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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