Correlation Between Ftfa Franklin and Wpg Partners
Can any of the company-specific risk be diversified away by investing in both Ftfa Franklin and Wpg Partners 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 Ftfa Franklin and Wpg Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ftfa Franklin Templeton Growth and Wpg Partners Smallmicro, you can compare the effects of market volatilities on Ftfa Franklin and Wpg Partners 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 Ftfa Franklin with a short position of Wpg Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ftfa Franklin and Wpg Partners.
Diversification Opportunities for Ftfa Franklin and Wpg Partners
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ftfa and Wpg is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ftfa Franklin Templeton Growth and Wpg Partners Smallmicro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wpg Partners Smallmicro and Ftfa Franklin 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 Ftfa Franklin Templeton Growth are associated (or correlated) with Wpg Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wpg Partners Smallmicro has no effect on the direction of Ftfa Franklin i.e., Ftfa Franklin and Wpg Partners go up and down completely randomly.
Pair Corralation between Ftfa Franklin and Wpg Partners
Assuming the 90 days horizon Ftfa Franklin Templeton Growth is expected to generate 0.59 times more return on investment than Wpg Partners. However, Ftfa Franklin Templeton Growth is 1.69 times less risky than Wpg Partners. It trades about 0.11 of its potential returns per unit of risk. Wpg Partners Smallmicro is currently generating about -0.05 per unit of risk. If you would invest 2,100 in Ftfa Franklin Templeton Growth on September 14, 2024 and sell it today you would earn a total of 20.00 from holding Ftfa Franklin Templeton Growth or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ftfa Franklin Templeton Growth vs. Wpg Partners Smallmicro
Performance |
| Timeline |
| Ftfa Franklin Templeton |
| Wpg Partners Smallmicro |
Ftfa Franklin and Wpg Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ftfa Franklin and Wpg Partners
The main advantage of trading using opposite Ftfa Franklin and Wpg Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ftfa Franklin position performs unexpectedly, Wpg Partners 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 Wpg Partners will offset losses from the drop in Wpg Partners' long position.| Ftfa Franklin vs. Ashmore Emerging Markets | Ftfa Franklin vs. Rbc Emerging Markets | Ftfa Franklin vs. Shelton Emerging Markets | Ftfa Franklin vs. Investec Emerging Markets |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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