Correlation Between Franklin FTSE and Franklin FTSE

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

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

Diversification Opportunities for Franklin FTSE and Franklin FTSE

0.39

Correlation Coefficient

Franklin FTSE  Franklin FTSE

Weak diversification

The 3 months correlation between Franklin and Franklin is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE India and Franklin FTSE Australia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Australia 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 India 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 Australia has no effect on the direction of Franklin FTSE i.e., Franklin FTSE and Franklin FTSE go up and down completely randomly.

Pair Corralation between Franklin FTSE and Franklin FTSE

Given the investment horizon of 90 days Franklin FTSE India is expected to under-perform the Franklin FTSE. But the etf apears to be less risky and, when comparing its historical volatility, Franklin FTSE India is 1.27 times less risky than Franklin FTSE. The etf trades about -0.14 of its potential returns per unit of risk. The Franklin FTSE Australia is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  3,036  in Franklin FTSE Australia on October 22, 2024 and sell it today you would lose (167.00) from holding Franklin FTSE Australia or give up 5.5% of portfolio value over 90 days.

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

Franklin FTSE India  vs.  Franklin FTSE Australia

Franklin FTSE India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin FTSE India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Franklin FTSE Australia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin FTSE Australia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Franklin FTSE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Franklin FTSE and Franklin FTSE

The main advantage of trading using opposite Franklin FTSE and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin FTSE 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 Franklin FTSE India and Franklin FTSE Australia 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.