Correlation Between JPMorgan BetaBuilders and Franklin FTSE

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

By analyzing existing cross correlation between JPMorgan BetaBuilders Developed and Franklin FTSE Germany, you can compare the effects of market volatilities on JPMorgan BetaBuilders 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 JPMorgan BetaBuilders with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan BetaBuilders and Franklin FTSE.

Diversification Opportunities for JPMorgan BetaBuilders and Franklin FTSE

0.34

Correlation Coefficient

JPMorgan BetaBuilders  Franklin FTSE

Weak diversification

The 3 months correlation between JPMorgan and Franklin is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan BetaBuilders Develope and Franklin FTSE Germany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Germany and JPMorgan BetaBuilders 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 JPMorgan BetaBuilders Developed 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 Germany has no effect on the direction of JPMorgan BetaBuilders i.e., JPMorgan BetaBuilders and Franklin FTSE go up and down completely randomly.

Pair Corralation between JPMorgan BetaBuilders and Franklin FTSE

Given the investment horizon of 90 days JPMorgan BetaBuilders Developed is expected to under-perform the Franklin FTSE. But the etf apears to be less risky and, when comparing its historical volatility, JPMorgan BetaBuilders Developed is 1.01 times less risky than Franklin FTSE. The etf trades about -0.13 of its potential returns per unit of risk. The Franklin FTSE Germany is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,531  in Franklin FTSE Germany on October 11, 2024 and sell it today you would earn a total of  24.00  from holding Franklin FTSE Germany or generate 0.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

JPMorgan BetaBuilders Develope  vs.  Franklin FTSE Germany

JPMorgan BetaBuilders

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan BetaBuilders Developed has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Franklin FTSE Germany

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin FTSE Germany has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Franklin FTSE is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with JPMorgan BetaBuilders and Franklin FTSE

The main advantage of trading using opposite JPMorgan BetaBuilders and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan BetaBuilders 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.

The idea behind JPMorgan BetaBuilders Developed and Franklin FTSE Germany 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..