Correlation Between Global X and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and Franklin FTSE Europe, you can compare the effects of market volatilities on Global X 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 Global X with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Franklin FTSE.
Diversification Opportunities for Global X and Franklin FTSE
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and Franklin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Franklin FTSE Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Europe 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 Funds 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 Europe has no effect on the direction of Global X i.e., Global X and Franklin FTSE go up and down completely randomly.
Pair Corralation between Global X and Franklin FTSE
Given the investment horizon of 90 days Global X Funds is expected to generate 1.05 times more return on investment than Franklin FTSE. However, Global X is 1.05 times more volatile than Franklin FTSE Europe. It trades about 0.08 of its potential returns per unit of risk. Franklin FTSE Europe is currently generating about 0.04 per unit of risk. If you would invest 2,494 in Global X Funds on September 1, 2024 and sell it today you would earn a total of 598.00 from holding Global X Funds or generate 23.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 87.13% |
| Values | Daily Returns |
Global X Funds vs. Franklin FTSE Europe
Performance |
| Timeline |
| Global X Funds |
| Franklin FTSE Europe |
Global X and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Franklin FTSE
The main advantage of trading using opposite Global X and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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.| Global X vs. iShares MSCI India | Global X vs. iShares India 50 | Global X vs. Invesco India ETF | Global X vs. Franklin FTSE India |
| Franklin FTSE vs. Franklin FTSE United | Franklin FTSE vs. SPDR Portfolio Europe | Franklin FTSE vs. Franklin FTSE Germany | 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |