Correlation Between Franklin FTSE and Barclays ETN
Can any of the company-specific risk be diversified away by investing in both Franklin FTSE and Barclays ETN 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 Barclays ETN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin FTSE Hong and Barclays ETN FI, you can compare the effects of market volatilities on Franklin FTSE and Barclays ETN 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 Barclays ETN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin FTSE and Barclays ETN.
Diversification Opportunities for Franklin FTSE and Barclays ETN
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and Barclays is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE Hong and Barclays ETN FI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays ETN FI 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 Hong are associated (or correlated) with Barclays ETN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays ETN FI has no effect on the direction of Franklin FTSE i.e., Franklin FTSE and Barclays ETN go up and down completely randomly.
Pair Corralation between Franklin FTSE and Barclays ETN
Given the investment horizon of 90 days Franklin FTSE Hong is expected to generate 2.03 times more return on investment than Barclays ETN. However, Franklin FTSE is 2.03 times more volatile than Barclays ETN FI. It trades about 0.07 of its potential returns per unit of risk. Barclays ETN FI is currently generating about -0.08 per unit of risk. If you would invest 1,659 in Franklin FTSE Hong on September 3, 2024 and sell it today you would earn a total of 138.00 from holding Franklin FTSE Hong or generate 8.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin FTSE Hong vs. Barclays ETN FI
Performance |
| Timeline |
| Franklin FTSE Hong |
| Barclays ETN FI |
Franklin FTSE and Barclays ETN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin FTSE and Barclays ETN
The main advantage of trading using opposite Franklin FTSE and Barclays ETN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin FTSE position performs unexpectedly, Barclays ETN 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 Barclays ETN will offset losses from the drop in Barclays ETN's long position.| Franklin FTSE vs. Franklin FTSE South | Franklin FTSE vs. Franklin FTSE Japan | Franklin FTSE vs. Franklin FTSE India | Franklin FTSE vs. Franklin FTSE Brazil |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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