Correlation Between Franklin FTSE and FLEH

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

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

Diversification Opportunities for Franklin FTSE and FLEH

0.2

Correlation Coefficient

Franklin FTSE  FLEH

Modest diversification

The 3 months correlation between Franklin and FLEH is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE Australia and FLEH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLEH and Franklin FTSE 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 Franklin FTSE Australia are associated (or correlated) with FLEH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLEH has no effect on the direction of Franklin FTSE i.e., Franklin FTSE and FLEH go up and down completely randomly.

Pair Corralation between Franklin FTSE and FLEH

If you would invest  3,028  in Franklin FTSE Australia on September 5, 2024 and sell it today you would earn a total of  82.00  from holding Franklin FTSE Australia or generate 2.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Franklin FTSE Australia  vs.  FLEH

Franklin FTSE Australia

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin FTSE Australia are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Franklin FTSE is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

FLEH

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Franklin FTSE and FLEH

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

The idea behind Franklin FTSE Australia and FLEH 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.