Correlation Between Ftfa Franklin and Investec Global
Can any of the company-specific risk be diversified away by investing in both Ftfa Franklin and Investec Global 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 Investec Global 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 Investec Global Franchise, you can compare the effects of market volatilities on Ftfa Franklin and Investec Global 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 Investec Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ftfa Franklin and Investec Global.
Diversification Opportunities for Ftfa Franklin and Investec Global
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ftfa and Investec is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ftfa Franklin Templeton Growth and Investec Global Franchise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Global Franchise 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 Investec Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Global Franchise has no effect on the direction of Ftfa Franklin i.e., Ftfa Franklin and Investec Global go up and down completely randomly.
Pair Corralation between Ftfa Franklin and Investec Global
Assuming the 90 days horizon Ftfa Franklin Templeton Growth is expected to generate 0.88 times more return on investment than Investec Global. However, Ftfa Franklin Templeton Growth is 1.14 times less risky than Investec Global. It trades about 0.08 of its potential returns per unit of risk. Investec Global Franchise is currently generating about 0.05 per unit of risk. If you would invest 1,626 in Ftfa Franklin Templeton Growth on October 18, 2024 and sell it today you would earn a total of 430.00 from holding Ftfa Franklin Templeton Growth or generate 26.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ftfa Franklin Templeton Growth vs. Investec Global Franchise
Performance |
| Timeline |
| Ftfa Franklin Templeton |
| Investec Global Franchise |
Ftfa Franklin and Investec Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ftfa Franklin and Investec Global
The main advantage of trading using opposite Ftfa Franklin and Investec Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ftfa Franklin position performs unexpectedly, Investec Global 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 Investec Global will offset losses from the drop in Investec Global's long position.| Ftfa Franklin vs. Siit Emerging Markets | Ftfa Franklin vs. Inverse Nasdaq 100 Strategy | Ftfa Franklin vs. Ashmore Emerging Markets | Ftfa Franklin vs. Western Assets Emerging |
| Investec Global vs. Ftfa Franklin Templeton Growth | Investec Global vs. T Rowe Price | Investec Global vs. Mid Cap Growth | Investec Global vs. Transamerica Capital Growth |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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