Correlation Between Franklin FTSE and FIRST TRUST
Can any of the company-specific risk be diversified away by investing in both Franklin FTSE and FIRST TRUST 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 FIRST TRUST 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 FIRST TRUST GLOBAL, you can compare the effects of market volatilities on Franklin FTSE and FIRST TRUST 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 FIRST TRUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin FTSE and FIRST TRUST.
Diversification Opportunities for Franklin FTSE and FIRST TRUST
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and FIRST is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE Brazil and FIRST TRUST GLOBAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST TRUST GLOBAL 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 FIRST TRUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST TRUST GLOBAL has no effect on the direction of Franklin FTSE i.e., Franklin FTSE and FIRST TRUST go up and down completely randomly.
Pair Corralation between Franklin FTSE and FIRST TRUST
Assuming the 90 days trading horizon Franklin FTSE Brazil is expected to under-perform the FIRST TRUST. In addition to that, Franklin FTSE is 3.56 times more volatile than FIRST TRUST GLOBAL. It trades about -0.36 of its total potential returns per unit of risk. FIRST TRUST GLOBAL is currently generating about 0.07 per unit of volatility. If you would invest 266,350 in FIRST TRUST GLOBAL on September 24, 2024 and sell it today you would earn a total of 1,550 from holding FIRST TRUST GLOBAL or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin FTSE Brazil vs. FIRST TRUST GLOBAL
Performance |
| Timeline |
| Franklin FTSE Brazil |
| FIRST TRUST GLOBAL |
Franklin FTSE and FIRST TRUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin FTSE and FIRST TRUST
The main advantage of trading using opposite Franklin FTSE and FIRST TRUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin FTSE position performs unexpectedly, FIRST TRUST 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 FIRST TRUST will offset losses from the drop in FIRST TRUST's long position.| Franklin FTSE vs. SP 500 VIX | Franklin FTSE vs. WisdomTree Natural Gas | Franklin FTSE vs. WisdomTree Natural Gas | Franklin FTSE vs. Leverage Shares 2x |
| FIRST TRUST vs. Scottish Mortgage Investment | FIRST TRUST vs. VinaCapital Vietnam Opportunity | FIRST TRUST vs. Edinburgh Worldwide Investment | FIRST TRUST vs. Baillie Gifford Growth |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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