Correlation Between SPDR Portfolio and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio 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 SPDR Portfolio and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Portfolio Europe and Franklin FTSE Europe, you can compare the effects of market volatilities on SPDR Portfolio 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 SPDR Portfolio with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and Franklin FTSE.
Diversification Opportunities for SPDR Portfolio and Franklin FTSE
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SPDR and Franklin is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio Europe 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 SPDR Portfolio 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 SPDR Portfolio Europe 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 SPDR Portfolio i.e., SPDR Portfolio and Franklin FTSE go up and down completely randomly.
Pair Corralation between SPDR Portfolio and Franklin FTSE
Given the investment horizon of 90 days SPDR Portfolio is expected to generate 1.0 times less return on investment than Franklin FTSE. In addition to that, SPDR Portfolio is 1.03 times more volatile than Franklin FTSE Europe. It trades about 0.05 of its total potential returns per unit of risk. Franklin FTSE Europe is currently generating about 0.05 per unit of volatility. If you would invest 2,690 in Franklin FTSE Europe on November 3, 2024 and sell it today you would earn a total of 260.50 from holding Franklin FTSE Europe or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio Europe vs. Franklin FTSE Europe
Performance |
| Timeline |
| SPDR Portfolio Europe |
| Franklin FTSE Europe |
SPDR Portfolio and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and Franklin FTSE
The main advantage of trading using opposite SPDR Portfolio and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio 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.| SPDR Portfolio vs. Franklin FTSE Europe | SPDR Portfolio vs. SPDR Portfolio MSCI | SPDR Portfolio vs. iShares Core MSCI | SPDR Portfolio vs. JPMorgan BetaBuilders Europe |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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