Correlation Between Global X and Franklin Bissett
Can any of the company-specific risk be diversified away by investing in both Global X and Franklin Bissett 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 Global X and Franklin Bissett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X NASDAQ 100 and Franklin Bissett Corporate, you can compare the effects of market volatilities on Global X and Franklin Bissett 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 Global X with a short position of Franklin Bissett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Franklin Bissett.
Diversification Opportunities for Global X and Franklin Bissett
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Franklin is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Global X NASDAQ 100 and Franklin Bissett Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Bissett Cor and Global X 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 Global X NASDAQ 100 are associated (or correlated) with Franklin Bissett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Bissett Cor has no effect on the direction of Global X i.e., Global X and Franklin Bissett go up and down completely randomly.
Pair Corralation between Global X and Franklin Bissett
Assuming the 90 days trading horizon Global X NASDAQ 100 is expected to generate 2.89 times more return on investment than Franklin Bissett. However, Global X is 2.89 times more volatile than Franklin Bissett Corporate. It trades about 0.24 of its potential returns per unit of risk. Franklin Bissett Corporate is currently generating about 0.22 per unit of risk. If you would invest 8,406 in Global X NASDAQ 100 on September 12, 2024 and sell it today you would earn a total of 419.00 from holding Global X NASDAQ 100 or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X NASDAQ 100 vs. Franklin Bissett Corporate
Performance |
| Timeline |
| Global X NASDAQ |
| Franklin Bissett Cor |
Global X and Franklin Bissett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Franklin Bissett
The main advantage of trading using opposite Global X and Franklin Bissett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Franklin Bissett 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 Bissett will offset losses from the drop in Franklin Bissett's long position.| Global X vs. Global X SP | Global X vs. iShares SPTSX Capped | Global X vs. iShares NASDAQ 100 | Global X vs. Global X SPTSX |
| Franklin Bissett vs. Franklin Global Aggregate | Franklin Bissett vs. Franklin Large Cap | Franklin Bissett vs. First Trust Senior |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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