Correlation Between GRIT Real and Franklin FTSE

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

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

Diversification Opportunities for GRIT Real and Franklin FTSE

0.66

Correlation Coefficient

GRIT Real  Franklin FTSE

Poor diversification

The 3 months correlation between GRIT and Franklin is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding GRIT Real Estate 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 GRIT Real 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 GRIT Real Estate 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 GRIT Real i.e., GRIT Real and Franklin FTSE go up and down completely randomly.

Pair Corralation between GRIT Real and Franklin FTSE

Assuming the 90 days trading horizon GRIT Real Estate is expected to under-perform the Franklin FTSE. In addition to that, GRIT Real is 1.38 times more volatile than Franklin FTSE Brazil. It trades about -0.33 of its total potential returns per unit of risk. Franklin FTSE Brazil is currently generating about -0.11 per unit of volatility. If you would invest  1,910  in Franklin FTSE Brazil on September 3, 2024 and sell it today you would lose (175.00) from holding Franklin FTSE Brazil or give up 9.16% of portfolio value over 90 days.

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

GRIT Real Estate  vs.  Franklin FTSE Brazil

GRIT Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRIT Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm 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. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with GRIT Real and Franklin FTSE

The main advantage of trading using opposite GRIT Real and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIT Real 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 GRIT Real Estate 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..