Correlation Between BlackRock Science and Franklin FTSE

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

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

Diversification Opportunities for BlackRock Science and Franklin FTSE

-0.7

Correlation Coefficient

BlackRock Science  Franklin FTSE

Excellent diversification

The 3 months correlation between BlackRock and Franklin is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Science Tech 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 BlackRock Science 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 BlackRock Science Tech 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 BlackRock Science i.e., BlackRock Science and Franklin FTSE go up and down completely randomly.

Pair Corralation between BlackRock Science and Franklin FTSE

Considering the 90-day investment horizon BlackRock Science Tech is expected to generate 0.58 times more return on investment than Franklin FTSE. However, BlackRock Science Tech is 1.73 times less risky than Franklin FTSE. It trades about -0.02 of its potential returns per unit of risk. Franklin FTSE Brazil is currently generating about -0.11 per unit of risk. If you would invest  3,739  in BlackRock Science Tech on October 9, 2024 and sell it today you would lose (24.00) from holding BlackRock Science Tech or give up 0.64% of portfolio value over 90 days.

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

BlackRock Science Tech  vs.  Franklin FTSE Brazil

BlackRock Science Tech

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Science Tech are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, BlackRock Science is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Franklin FTSE Brazil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin FTSE Brazil has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Etf's fundamental drivers remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Pair Trading with BlackRock Science and Franklin FTSE

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

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.