Correlation Between Global X and Franklin Exponential
Can any of the company-specific risk be diversified away by investing in both Global X and Franklin Exponential 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 Global X and Franklin Exponential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Thematic and Franklin Exponential Data, you can compare the effects of market volatilities on Global X and Franklin Exponential 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 Global X with a short position of Franklin Exponential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Franklin Exponential.
Diversification Opportunities for Global X and Franklin Exponential
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and Franklin is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Global X Thematic and Franklin Exponential Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Exponential Data and Global X 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 Global X Thematic are associated (or correlated) with Franklin Exponential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Exponential Data has no effect on the direction of Global X i.e., Global X and Franklin Exponential go up and down completely randomly.
Pair Corralation between Global X and Franklin Exponential
Given the investment horizon of 90 days Global X is expected to generate 1.6 times less return on investment than Franklin Exponential. In addition to that, Global X is 1.14 times more volatile than Franklin Exponential Data. It trades about 0.02 of its total potential returns per unit of risk. Franklin Exponential Data is currently generating about 0.04 per unit of volatility. If you would invest 2,360 in Franklin Exponential Data on October 22, 2024 and sell it today you would earn a total of 223.00 from holding Franklin Exponential Data or generate 9.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Global X Thematic vs. Franklin Exponential Data
Performance |
Timeline |
Global X Thematic |
Franklin Exponential Data |
Global X and Franklin Exponential Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global X and Franklin Exponential
The main advantage of trading using opposite Global X and Franklin Exponential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Franklin Exponential 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 Exponential will offset losses from the drop in Franklin Exponential's long position.The idea behind Global X Thematic and Franklin Exponential Data 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.Franklin Exponential vs. Franklin Disruptive Commerce | Franklin Exponential vs. Franklin Templeton ETF | Franklin Exponential vs. Esoterica NextG Economy | Franklin Exponential vs. TrueShares Technology AI |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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