Correlation Between Franklin FTSE and FLFR

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

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

Diversification Opportunities for Franklin FTSE and FLFR

0.0

Correlation Coefficient

Franklin FTSE  FLFR

Pay attention - limited upside

The 3 months correlation between Franklin and FLFR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE Japan and FLFR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLFR 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 Japan are associated (or correlated) with FLFR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLFR has no effect on the direction of Franklin FTSE i.e., Franklin FTSE and FLFR go up and down completely randomly.

Pair Corralation between Franklin FTSE and FLFR

If you would invest  2,860  in Franklin FTSE Japan on December 28, 2024 and sell it today you would earn a total of  160.00  from holding Franklin FTSE Japan or generate 5.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Franklin FTSE Japan  vs.  FLFR

Franklin FTSE Japan

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin FTSE Japan are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward-looking indicators, Franklin FTSE is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

FLFR

Risk-Adjusted Performance

Very Weak

Over the last 90 days FLFR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, FLFR 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 Franklin FTSE and FLFR

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

The idea behind Franklin FTSE Japan and FLFR 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.