Correlation Between Franklin FTSE and Amundi Index
Can any of the company-specific risk be diversified away by investing in both Franklin FTSE and Amundi Index 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 Amundi Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin FTSE Brazil and Amundi Index Solutions, you can compare the effects of market volatilities on Franklin FTSE and Amundi Index 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 Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin FTSE and Amundi Index.
Diversification Opportunities for Franklin FTSE and Amundi Index
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Amundi is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE Brazil and Amundi Index Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Index Solutions 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 Brazil are associated (or correlated) with Amundi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Index Solutions has no effect on the direction of Franklin FTSE i.e., Franklin FTSE and Amundi Index go up and down completely randomly.
Pair Corralation between Franklin FTSE and Amundi Index
Assuming the 90 days trading horizon Franklin FTSE Brazil is expected to under-perform the Amundi Index. In addition to that, Franklin FTSE is 1.46 times more volatile than Amundi Index Solutions. It trades about -0.21 of its total potential returns per unit of risk. Amundi Index Solutions is currently generating about -0.27 per unit of volatility. If you would invest 4,198 in Amundi Index Solutions on October 9, 2024 and sell it today you would lose (158.00) from holding Amundi Index Solutions or give up 3.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin FTSE Brazil vs. Amundi Index Solutions
Performance |
| Timeline |
| Franklin FTSE Brazil |
| Amundi Index Solutions |
Franklin FTSE and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin FTSE and Amundi Index
The main advantage of trading using opposite Franklin FTSE and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin FTSE position performs unexpectedly, Amundi Index 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 Amundi Index will offset losses from the drop in Amundi Index's long position.| Franklin FTSE vs. Franklin LibertyQ Global | Franklin FTSE vs. Franklin Libertyshares ICAV | Franklin FTSE vs. Franklin FTSE Asia | Franklin FTSE vs. Franklin FTSE Brazil |
| Amundi Index vs. Amundi EUR High | Amundi Index vs. Amundi Index Solutions | Amundi Index vs. Amundi MSCI Pacific | Amundi Index vs. Amundi MSCI Europe |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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