Correlation Between IShares AsiaPacific and Franklin Templeton
Can any of the company-specific risk be diversified away by investing in both IShares AsiaPacific and Franklin Templeton 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 IShares AsiaPacific and Franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares AsiaPacific Dividend and Franklin Templeton ETF, you can compare the effects of market volatilities on IShares AsiaPacific and Franklin Templeton 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 IShares AsiaPacific with a short position of Franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares AsiaPacific and Franklin Templeton.
Diversification Opportunities for IShares AsiaPacific and Franklin Templeton
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Franklin is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding iShares AsiaPacific Dividend and Franklin Templeton ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Templeton ETF and IShares AsiaPacific 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 iShares AsiaPacific Dividend are associated (or correlated) with Franklin Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Templeton ETF has no effect on the direction of IShares AsiaPacific i.e., IShares AsiaPacific and Franklin Templeton go up and down completely randomly.
Pair Corralation between IShares AsiaPacific and Franklin Templeton
Given the investment horizon of 90 days iShares AsiaPacific Dividend is expected to generate 0.94 times more return on investment than Franklin Templeton. However, iShares AsiaPacific Dividend is 1.07 times less risky than Franklin Templeton. It trades about 0.07 of its potential returns per unit of risk. Franklin Templeton ETF is currently generating about 0.06 per unit of risk. If you would invest 3,051 in iShares AsiaPacific Dividend on August 28, 2024 and sell it today you would earn a total of 673.00 from holding iShares AsiaPacific Dividend or generate 22.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
iShares AsiaPacific Dividend vs. Franklin Templeton ETF
Performance |
| Timeline |
| iShares AsiaPacific |
| Franklin Templeton ETF |
IShares AsiaPacific and Franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares AsiaPacific and Franklin Templeton
The main advantage of trading using opposite IShares AsiaPacific and Franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares AsiaPacific position performs unexpectedly, Franklin Templeton 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 Templeton will offset losses from the drop in Franklin Templeton's long position.| IShares AsiaPacific vs. Matthews China Active | IShares AsiaPacific vs. MAYBANK EMERGING ETF | IShares AsiaPacific vs. Matthews Emerging Markets | IShares AsiaPacific vs. JP Morgan Exchange Traded |
| Franklin Templeton vs. Invesco PureBeta MSCI | Franklin Templeton vs. Aquagold International | Franklin Templeton vs. Morningstar Unconstrained Allocation | Franklin Templeton vs. High Yield Municipal Fund |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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