Correlation Between Franklin FTSE and European Metals
Can any of the company-specific risk be diversified away by investing in both Franklin FTSE and European Metals 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 European Metals 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 European Metals Holdings, you can compare the effects of market volatilities on Franklin FTSE and European Metals 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 European Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin FTSE and European Metals.
Diversification Opportunities for Franklin FTSE and European Metals
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and European is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE Brazil and European Metals Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Metals Holdings 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 European Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Metals Holdings has no effect on the direction of Franklin FTSE i.e., Franklin FTSE and European Metals go up and down completely randomly.
Pair Corralation between Franklin FTSE and European Metals
Assuming the 90 days trading horizon Franklin FTSE Brazil is expected to generate 0.37 times more return on investment than European Metals. However, Franklin FTSE Brazil is 2.68 times less risky than European Metals. It trades about 0.02 of its potential returns per unit of risk. European Metals Holdings is currently generating about -0.07 per unit of risk. If you would invest 1,588 in Franklin FTSE Brazil on September 4, 2024 and sell it today you would earn a total of 136.00 from holding Franklin FTSE Brazil or generate 8.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin FTSE Brazil vs. European Metals Holdings
Performance |
| Timeline |
| Franklin FTSE Brazil |
| European Metals Holdings |
Franklin FTSE and European Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin FTSE and European Metals
The main advantage of trading using opposite Franklin FTSE and European Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin FTSE position performs unexpectedly, European Metals 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 European Metals will offset losses from the drop in European Metals' 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 |
| European Metals vs. Antofagasta PLC | European Metals vs. Atalaya Mining | European Metals vs. Ferrexpo PLC | European Metals vs. Amaroq Minerals |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |