Correlation Between Franklin FTSE and Global X
Can any of the company-specific risk be diversified away by investing in both Franklin FTSE and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin FTSE Europe and Global X Funds, you can compare the effects of market volatilities on Franklin FTSE and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin FTSE and Global X.
Diversification Opportunities for Franklin FTSE and Global X
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Global is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE Europe and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds 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 Europe are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of Franklin FTSE i.e., Franklin FTSE and Global X go up and down completely randomly.
Pair Corralation between Franklin FTSE and Global X
Given the investment horizon of 90 days Franklin FTSE Europe is expected to generate 0.97 times more return on investment than Global X. However, Franklin FTSE Europe is 1.03 times less risky than Global X. It trades about 0.06 of its potential returns per unit of risk. Global X Funds is currently generating about 0.03 per unit of risk. If you would invest 2,386 in Franklin FTSE Europe on November 29, 2024 and sell it today you would earn a total of 669.90 from holding Franklin FTSE Europe or generate 28.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 77.53% |
| Values | Daily Returns |
Franklin FTSE Europe vs. Global X Funds
Performance |
| Timeline |
| Franklin FTSE Europe |
| Global X Funds |
Franklin FTSE and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin FTSE and Global X
The main advantage of trading using opposite Franklin FTSE and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin FTSE position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Franklin FTSE vs. Franklin FTSE United | Franklin FTSE vs. SPDR Portfolio Europe | Franklin FTSE vs. Franklin FTSE Germany | Franklin FTSE vs. Franklin FTSE Japan |
| Global X vs. Davis Select International | Global X vs. Principal Value ETF | Global X vs. WisdomTree Emerging Markets | Global X vs. Ballast SmallMid Cap |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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