Correlation Between Exchange Traded and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both Exchange Traded and Franklin FTSE 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 Exchange Traded and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Traded Concepts and Franklin FTSE India, you can compare the effects of market volatilities on Exchange Traded and Franklin FTSE 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 Exchange Traded with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Traded and Franklin FTSE.
Diversification Opportunities for Exchange Traded and Franklin FTSE
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Exchange and Franklin is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts and Franklin FTSE India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE India and Exchange Traded 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 Exchange Traded Concepts are associated (or correlated) with Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE India has no effect on the direction of Exchange Traded i.e., Exchange Traded and Franklin FTSE go up and down completely randomly.
Pair Corralation between Exchange Traded and Franklin FTSE
Given the investment horizon of 90 days Exchange Traded is expected to generate 1.32 times less return on investment than Franklin FTSE. In addition to that, Exchange Traded is 1.26 times more volatile than Franklin FTSE India. It trades about 0.05 of its total potential returns per unit of risk. Franklin FTSE India is currently generating about 0.09 per unit of volatility. If you would invest 3,044 in Franklin FTSE India on August 28, 2024 and sell it today you would earn a total of 881.00 from holding Franklin FTSE India or generate 28.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exchange Traded Concepts vs. Franklin FTSE India
Performance |
| Timeline |
| Exchange Traded Concepts |
| Franklin FTSE India |
Exchange Traded and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Traded and Franklin FTSE
The main advantage of trading using opposite Exchange Traded and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Traded position performs unexpectedly, Franklin FTSE 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 FTSE will offset losses from the drop in Franklin FTSE's long position.| Exchange Traded vs. VanEck India Growth | Exchange Traded vs. Franklin FTSE India | Exchange Traded vs. Columbia India Consumer | Exchange Traded vs. First Trust India |
| Franklin FTSE vs. Franklin FTSE Brazil | Franklin FTSE vs. Franklin FTSE China | Franklin FTSE vs. Franklin FTSE South | Franklin FTSE vs. Franklin FTSE Japan |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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