Correlation Between Franklin FTSE and CHIM
Can any of the company-specific risk be diversified away by investing in both Franklin FTSE and CHIM 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 CHIM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin FTSE Brazil and CHIM, you can compare the effects of market volatilities on Franklin FTSE and CHIM 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 CHIM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin FTSE and CHIM.
Diversification Opportunities for Franklin FTSE and CHIM
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and CHIM is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE Brazil and CHIM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIM 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 Brazil are associated (or correlated) with CHIM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIM has no effect on the direction of Franklin FTSE i.e., Franklin FTSE and CHIM go up and down completely randomly.
Pair Corralation between Franklin FTSE and CHIM
If you would invest 1,644 in CHIM on September 5, 2024 and sell it today you would earn a total of 0.00 from holding CHIM or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 1.56% |
Values | Daily Returns |
Franklin FTSE Brazil vs. CHIM
Performance |
Timeline |
Franklin FTSE Brazil |
CHIM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Franklin FTSE and CHIM Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franklin FTSE and CHIM
The main advantage of trading using opposite Franklin FTSE and CHIM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin FTSE position performs unexpectedly, CHIM 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 CHIM will offset losses from the drop in CHIM's long position.Franklin FTSE vs. First Trust Asia | Franklin FTSE vs. First Trust Japan | Franklin FTSE vs. First Trust Germany | Franklin FTSE vs. First Trust United |
CHIM vs. Franklin FTSE South | CHIM vs. Franklin FTSE Japan | CHIM vs. Franklin FTSE India | CHIM vs. Franklin FTSE Brazil |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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