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 India 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
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and KraneShares is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE India 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 India 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 is expected to generate 27.24 times less return on investment than KraneShares SSE. But when comparing it to its historical volatility, Franklin FTSE India is 6.66 times less risky than KraneShares SSE. It trades about 0.02 of its potential returns per unit of risk. KraneShares SSE STAR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,065 in KraneShares SSE STAR on September 12, 2024 and sell it today you would earn a total of 308.00 from holding KraneShares SSE STAR or generate 28.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin FTSE India vs. KraneShares SSE STAR
Performance |
| Timeline |
| Franklin FTSE India |
| 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. iShares India 50 | Franklin FTSE vs. iShares MSCI China | Franklin FTSE vs. VanEck Vietnam ETF | Franklin FTSE vs. WisdomTree India Earnings |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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