Correlation Between Franklin FTSE and KraneShares SSE
Can any of the company-specific risk be diversified away by investing in both Franklin FTSE and KraneShares SSE 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 FTSE and KraneShares SSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin FTSE Brazil and KraneShares SSE STAR, you can compare the effects of market volatilities on Franklin FTSE and KraneShares SSE 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 FTSE with a short position of KraneShares SSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin FTSE and KraneShares SSE.
Diversification Opportunities for Franklin FTSE and KraneShares SSE
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and KraneShares is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE Brazil and KraneShares SSE STAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares SSE STAR and Franklin FTSE 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 FTSE Brazil are associated (or correlated) with KraneShares SSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares SSE STAR has no effect on the direction of Franklin FTSE i.e., Franklin FTSE and KraneShares SSE go up and down completely randomly.
Pair Corralation between Franklin FTSE and KraneShares SSE
Given the investment horizon of 90 days Franklin FTSE Brazil is expected to under-perform the KraneShares SSE. But the etf apears to be less risky and, when comparing its historical volatility, Franklin FTSE Brazil is 2.29 times less risky than KraneShares SSE. The etf trades about -0.13 of its potential returns per unit of risk. The KraneShares SSE STAR is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,420 in KraneShares SSE STAR on September 12, 2024 and sell it today you would lose (47.00) from holding KraneShares SSE STAR or give up 3.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Franklin FTSE Brazil vs. KraneShares SSE STAR
Performance |
Timeline |
Franklin FTSE Brazil |
KraneShares SSE STAR |
Franklin FTSE and KraneShares SSE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin FTSE and KraneShares SSE
The main advantage of trading using opposite Franklin FTSE and KraneShares SSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin FTSE position performs unexpectedly, KraneShares SSE 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 KraneShares SSE will offset losses from the drop in KraneShares SSE's long position.Franklin FTSE vs. Franklin FTSE Mexico | Franklin FTSE vs. Franklin FTSE India | Franklin FTSE vs. Franklin FTSE South | Franklin FTSE vs. Franklin FTSE Japan |
KraneShares SSE vs. KraneShares MSCI All | KraneShares SSE vs. KraneShares Bosera MSCI | KraneShares SSE vs. KraneShares MSCI 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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