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 Hong 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
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Global is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE Hong 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 Hong 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 Hong is expected to under-perform the Global X. In addition to that, Franklin FTSE is 1.6 times more volatile than Global X Funds. It trades about -0.01 of its total potential returns per unit of risk. Global X Funds is currently generating about 0.08 per unit of volatility. If you would invest 2,494 in Global X Funds on September 1, 2024 and sell it today you would earn a total of 598.00 from holding Global X Funds or generate 23.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.13% |
| Values | Daily Returns |
Franklin FTSE Hong vs. Global X Funds
Performance |
| Timeline |
| Franklin FTSE Hong |
| 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. Xtrackers Harvest CSI | Franklin FTSE vs. Aquagold International | Franklin FTSE vs. Thrivent High Yield | Franklin FTSE vs. Morningstar Unconstrained Allocation |
| Global X vs. iShares MSCI India | Global X vs. iShares India 50 | Global X vs. Invesco India ETF | Global X vs. Franklin FTSE India |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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