Correlation Between Franklin FTSE and IXSE
Can any of the company-specific risk be diversified away by investing in both Franklin FTSE and IXSE 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 IXSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin FTSE India and IXSE, you can compare the effects of market volatilities on Franklin FTSE and IXSE 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 IXSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin FTSE and IXSE.
Diversification Opportunities for Franklin FTSE and IXSE
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and IXSE is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE India and IXSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IXSE 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 India are associated (or correlated) with IXSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IXSE has no effect on the direction of Franklin FTSE i.e., Franklin FTSE and IXSE go up and down completely randomly.
Pair Corralation between Franklin FTSE and IXSE
Given the investment horizon of 90 days Franklin FTSE is expected to generate 1.85 times less return on investment than IXSE. In addition to that, Franklin FTSE is 1.96 times more volatile than IXSE. It trades about 0.09 of its total potential returns per unit of risk. IXSE is currently generating about 0.32 per unit of volatility. If you would invest 3,318 in IXSE on August 28, 2024 and sell it today you would earn a total of 70.00 from holding IXSE or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.24% |
| Values | Daily Returns |
Franklin FTSE India vs. IXSE
Performance |
| Timeline |
| Franklin FTSE India |
| IXSE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Franklin FTSE and IXSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin FTSE and IXSE
The main advantage of trading using opposite Franklin FTSE and IXSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin FTSE position performs unexpectedly, IXSE 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 IXSE will offset losses from the drop in IXSE's long position.| Franklin FTSE vs. Franklin FTSE Brazil | Franklin FTSE vs. Franklin FTSE China | Franklin FTSE vs. Franklin FTSE South | Franklin FTSE vs. Franklin FTSE Japan |
| IXSE vs. Franklin FTSE India | IXSE vs. VanEck India Growth | IXSE vs. First Trust India | IXSE vs. Columbia India Consumer |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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