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 Brazil, 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
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Franklin is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Franklin FTSE Brazil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Brazil 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 Brazil 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 0.65 times more return on investment than Franklin FTSE. However, Global X Funds is 1.55 times less risky than Franklin FTSE. It trades about 0.16 of its potential returns per unit of risk. Franklin FTSE Brazil is currently generating about 0.02 per unit of risk. If you would invest 2,463 in Global X Funds on September 4, 2024 and sell it today you would earn a total of 1,442 from holding Global X Funds or generate 58.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 62.42% |
| Values | Daily Returns |
Global X Funds vs. Franklin FTSE Brazil
Performance |
| Timeline |
| Global X Funds |
| Franklin FTSE Brazil |
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. First Trust Indxx | Global X vs. Direxion Daily Industrials | Global X vs. NATO | Global X vs. FlexShares STOXX Global |
| Franklin FTSE vs. Franklin FTSE Mexico | Franklin FTSE vs. Franklin FTSE India | 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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