Correlation Between Franklin FTSE and KBUY
Can any of the company-specific risk be diversified away by investing in both Franklin FTSE and KBUY 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 KBUY 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 KBUY, you can compare the effects of market volatilities on Franklin FTSE and KBUY 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 KBUY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin FTSE and KBUY.
Diversification Opportunities for Franklin FTSE and KBUY
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and KBUY is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE South and KBUY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBUY 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 KBUY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBUY has no effect on the direction of Franklin FTSE i.e., Franklin FTSE and KBUY go up and down completely randomly.
Pair Corralation between Franklin FTSE and KBUY
If you would invest 1,473 in KBUY on September 12, 2024 and sell it today you would earn a total of 0.00 from holding KBUY or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 1.56% |
| Values | Daily Returns |
Franklin FTSE South vs. KBUY
Performance |
| Timeline |
| Franklin FTSE South |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| KBUY |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Franklin FTSE and KBUY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin FTSE and KBUY
The main advantage of trading using opposite Franklin FTSE and KBUY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin FTSE position performs unexpectedly, KBUY 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 KBUY will offset losses from the drop in KBUY's long position.The idea behind Franklin FTSE South and KBUY pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| KBUY vs. KraneShares CSI China | KBUY vs. iShares MSCI India | KBUY vs. Xtrackers Harvest CSI | KBUY vs. SPDR SP 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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