Correlation Between IShares Russell and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both IShares Russell 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 IShares Russell and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Russell 1000 and Franklin FTSE South, you can compare the effects of market volatilities on IShares Russell 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 IShares Russell with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and Franklin FTSE.
Diversification Opportunities for IShares Russell and Franklin FTSE
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Franklin is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell 1000 and Franklin FTSE South in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE South and IShares Russell 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 Russell 1000 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 South has no effect on the direction of IShares Russell i.e., IShares Russell and Franklin FTSE go up and down completely randomly.
Pair Corralation between IShares Russell and Franklin FTSE
Considering the 90-day investment horizon iShares Russell 1000 is expected to generate 0.81 times more return on investment than Franklin FTSE. However, iShares Russell 1000 is 1.24 times less risky than Franklin FTSE. It trades about 0.09 of its potential returns per unit of risk. Franklin FTSE South is currently generating about -0.03 per unit of risk. If you would invest 32,397 in iShares Russell 1000 on November 3, 2024 and sell it today you would earn a total of 8,534 from holding iShares Russell 1000 or generate 26.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Russell 1000 vs. Franklin FTSE South
Performance |
| Timeline |
| iShares Russell 1000 |
| Franklin FTSE South |
IShares Russell and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and Franklin FTSE
The main advantage of trading using opposite IShares Russell and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell 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.| IShares Russell vs. iShares Russell 1000 | IShares Russell vs. iShares Russell 2000 | IShares Russell vs. iShares Russell 2000 | IShares Russell vs. iShares Russell 1000 |
| Franklin FTSE vs. Franklin FTSE Japan | Franklin FTSE vs. Franklin FTSE Taiwan | Franklin FTSE vs. Franklin FTSE China | Franklin FTSE vs. Franklin FTSE Brazil |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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