Correlation Between WisdomTree International and Franklin Exponential

Can any of the company-specific risk be diversified away by investing in both WisdomTree International and Franklin Exponential 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 International and Franklin Exponential into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WisdomTree International Al and Franklin Exponential Data, you can compare the effects of market volatilities on WisdomTree International and Franklin Exponential 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 International with a short position of Franklin Exponential. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree International and Franklin Exponential.

Diversification Opportunities for WisdomTree International and Franklin Exponential

-0.73

Correlation Coefficient

WisdomTree International  Franklin Exponential

Pay attention - limited upside

The 3 months correlation between WisdomTree and Franklin is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree International Al and Franklin Exponential Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Exponential Data and WisdomTree International 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 International Al are associated (or correlated) with Franklin Exponential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Exponential Data has no effect on the direction of WisdomTree International i.e., WisdomTree International and Franklin Exponential go up and down completely randomly.

Pair Corralation between WisdomTree International and Franklin Exponential

Given the investment horizon of 90 days WisdomTree International Al is expected to under-perform the Franklin Exponential. But the etf apears to be less risky and, when comparing its historical volatility, WisdomTree International Al is 1.32 times less risky than Franklin Exponential. The etf trades about -0.07 of its potential returns per unit of risk. The Franklin Exponential Data is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  2,254  in Franklin Exponential Data on September 1, 2024 and sell it today you would earn a total of  416.00  from holding Franklin Exponential Data or generate 18.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

WisdomTree International Al  vs.  Franklin Exponential Data

WisdomTree International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WisdomTree International Al has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, WisdomTree International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Franklin Exponential Data

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Exponential Data are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Franklin Exponential unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WisdomTree International and Franklin Exponential

The main advantage of trading using opposite WisdomTree International and Franklin Exponential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree International position performs unexpectedly, Franklin Exponential 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 Exponential will offset losses from the drop in Franklin Exponential's long position.

The idea behind WisdomTree International Al and Franklin Exponential Data pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.