Correlation Between AIM ETF and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both AIM ETF 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 AIM ETF and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIM ETF Products and Franklin FTSE Brazil, you can compare the effects of market volatilities on AIM ETF 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 AIM ETF with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and Franklin FTSE.
Diversification Opportunities for AIM ETF and Franklin FTSE
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AIM and Franklin is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products 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 AIM ETF 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 AIM ETF Products 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 AIM ETF i.e., AIM ETF and Franklin FTSE go up and down completely randomly.
Pair Corralation between AIM ETF and Franklin FTSE
Given the investment horizon of 90 days AIM ETF Products is expected to generate 0.11 times more return on investment than Franklin FTSE. However, AIM ETF Products is 8.72 times less risky than Franklin FTSE. It trades about 0.51 of its potential returns per unit of risk. Franklin FTSE Brazil is currently generating about -0.19 per unit of risk. If you would invest 2,634 in AIM ETF Products on September 1, 2024 and sell it today you would earn a total of 51.00 from holding AIM ETF Products or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
AIM ETF Products vs. Franklin FTSE Brazil
Performance |
| Timeline |
| AIM ETF Products |
| Franklin FTSE Brazil |
AIM ETF and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM ETF and Franklin FTSE
The main advantage of trading using opposite AIM ETF and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF 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.| AIM ETF vs. FT Vest Equity | AIM ETF vs. Northern Lights | AIM ETF vs. Dimensional International High | AIM ETF vs. Matthews China Discovery |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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