Correlation Between Franklin FTSE and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both Franklin FTSE and Franklin FTSE 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 Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin FTSE South and Franklin FTSE India, you can compare the effects of market volatilities on Franklin FTSE and Franklin FTSE 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 Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin FTSE and Franklin FTSE.
Diversification Opportunities for Franklin FTSE and Franklin FTSE
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Franklin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE South and Franklin FTSE India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE India 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 South are associated (or correlated) with Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE India has no effect on the direction of Franklin FTSE i.e., Franklin FTSE and Franklin FTSE go up and down completely randomly.
Pair Corralation between Franklin FTSE and Franklin FTSE
Given the investment horizon of 90 days Franklin FTSE South is expected to under-perform the Franklin FTSE. In addition to that, Franklin FTSE is 2.0 times more volatile than Franklin FTSE India. It trades about -0.14 of its total potential returns per unit of risk. Franklin FTSE India is currently generating about -0.22 per unit of volatility. If you would invest 3,967 in Franklin FTSE India on August 24, 2024 and sell it today you would lose (148.00) from holding Franklin FTSE India or give up 3.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin FTSE South vs. Franklin FTSE India
Performance |
| Timeline |
| Franklin FTSE South |
| Franklin FTSE India |
Franklin FTSE and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin FTSE and Franklin FTSE
The main advantage of trading using opposite Franklin FTSE and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin FTSE position performs unexpectedly, Franklin FTSE 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 Franklin FTSE will offset losses from the drop in Franklin FTSE's long position.| Franklin FTSE vs. Franklin FTSE Japan | Franklin FTSE vs. Franklin FTSE Taiwan | Franklin FTSE vs. Franklin FTSE China | Franklin FTSE vs. Franklin FTSE Brazil |
| Franklin FTSE vs. Franklin FTSE Brazil | Franklin FTSE vs. Franklin FTSE China | Franklin FTSE vs. Franklin FTSE South | Franklin FTSE vs. Franklin FTSE Japan |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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