Correlation Between IShares Expanded and Franklin Exponential
Can any of the company-specific risk be diversified away by investing in both IShares Expanded and Franklin Exponential 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 IShares Expanded and Franklin Exponential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Expanded Tech and Franklin Exponential Data, you can compare the effects of market volatilities on IShares Expanded and Franklin Exponential 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 IShares Expanded with a short position of Franklin Exponential. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Expanded and Franklin Exponential.
Diversification Opportunities for IShares Expanded and Franklin Exponential
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Franklin is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding iShares Expanded Tech and Franklin Exponential Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Exponential Data and IShares Expanded 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 iShares Expanded Tech are associated (or correlated) with Franklin Exponential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Exponential Data has no effect on the direction of IShares Expanded i.e., IShares Expanded and Franklin Exponential go up and down completely randomly.
Pair Corralation between IShares Expanded and Franklin Exponential
Considering the 90-day investment horizon IShares Expanded is expected to generate 2.16 times less return on investment than Franklin Exponential. But when comparing it to its historical volatility, iShares Expanded Tech is 1.0 times less risky than Franklin Exponential. It trades about 0.14 of its potential returns per unit of risk. Franklin Exponential Data is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,442 in Franklin Exponential Data on August 25, 2024 and sell it today you would earn a total of 220.00 from holding Franklin Exponential Data or generate 9.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Expanded Tech vs. Franklin Exponential Data
Performance |
| Timeline |
| iShares Expanded Tech |
| Franklin Exponential Data |
IShares Expanded and Franklin Exponential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Expanded and Franklin Exponential
The main advantage of trading using opposite IShares Expanded and Franklin Exponential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Expanded position performs unexpectedly, Franklin Exponential 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 Exponential will offset losses from the drop in Franklin Exponential's long position.| IShares Expanded vs. iShares Global Tech | IShares Expanded vs. iShares Technology ETF | IShares Expanded vs. iShares Consumer Discretionary | IShares Expanded vs. iShares Expanded Tech Software |
| Franklin Exponential vs. Franklin Disruptive Commerce | Franklin Exponential vs. Franklin Templeton ETF | Franklin Exponential vs. Esoterica NextG Economy | Franklin Exponential vs. TrueShares Technology AI |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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