Correlation Between WisdomTree Managed and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both WisdomTree Managed 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 WisdomTree Managed and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Managed Futures and Franklin FTSE Latin, you can compare the effects of market volatilities on WisdomTree Managed 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 WisdomTree Managed with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Managed and Franklin FTSE.
Diversification Opportunities for WisdomTree Managed and Franklin FTSE
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WisdomTree and Franklin is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Managed Futures and Franklin FTSE Latin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Latin and WisdomTree Managed 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 WisdomTree Managed Futures 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 Latin has no effect on the direction of WisdomTree Managed i.e., WisdomTree Managed and Franklin FTSE go up and down completely randomly.
Pair Corralation between WisdomTree Managed and Franklin FTSE
Given the investment horizon of 90 days WisdomTree Managed Futures is expected to generate 0.44 times more return on investment than Franklin FTSE. However, WisdomTree Managed Futures is 2.28 times less risky than Franklin FTSE. It trades about 0.06 of its potential returns per unit of risk. Franklin FTSE Latin is currently generating about 0.01 per unit of risk. If you would invest 3,002 in WisdomTree Managed Futures on November 27, 2024 and sell it today you would earn a total of 489.00 from holding WisdomTree Managed Futures or generate 16.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Managed Futures vs. Franklin FTSE Latin
Performance |
| Timeline |
| WisdomTree Managed |
| Franklin FTSE Latin |
WisdomTree Managed and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Managed and Franklin FTSE
The main advantage of trading using opposite WisdomTree Managed and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Managed 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.| WisdomTree Managed vs. First Trust Managed | WisdomTree Managed vs. iMGP DBi Managed | WisdomTree Managed vs. First Trust LongShort | WisdomTree Managed vs. WisdomTree CBOE SP |
| Franklin FTSE vs. Franklin FTSE Mexico | Franklin FTSE vs. Franklin FTSE Brazil | Franklin FTSE vs. Franklin FTSE India | Franklin FTSE vs. Franklin FTSE Taiwan |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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