Correlation Between SPDR MSCI and Franklin International
Can any of the company-specific risk be diversified away by investing in both SPDR MSCI and Franklin International 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 SPDR MSCI and Franklin International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR MSCI Emerging and Franklin International Core, you can compare the effects of market volatilities on SPDR MSCI and Franklin International 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 SPDR MSCI with a short position of Franklin International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR MSCI and Franklin International.
Diversification Opportunities for SPDR MSCI and Franklin International
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and Franklin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MSCI Emerging and Franklin International Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin International and SPDR MSCI 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 SPDR MSCI Emerging are associated (or correlated) with Franklin International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin International has no effect on the direction of SPDR MSCI i.e., SPDR MSCI and Franklin International go up and down completely randomly.
Pair Corralation between SPDR MSCI and Franklin International
Given the investment horizon of 90 days SPDR MSCI Emerging is expected to generate 1.05 times more return on investment than Franklin International. However, SPDR MSCI is 1.05 times more volatile than Franklin International Core. It trades about 0.1 of its potential returns per unit of risk. Franklin International Core is currently generating about 0.02 per unit of risk. If you would invest 5,772 in SPDR MSCI Emerging on February 4, 2024 and sell it today you would earn a total of 107.00 from holding SPDR MSCI Emerging or generate 1.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
SPDR MSCI Emerging vs. Franklin International Core
Performance |
Timeline |
SPDR MSCI Emerging |
Franklin International |
SPDR MSCI and Franklin International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR MSCI and Franklin International
The main advantage of trading using opposite SPDR MSCI and Franklin International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR MSCI position performs unexpectedly, Franklin International 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 International will offset losses from the drop in Franklin International's long position.SPDR MSCI vs. SPDR MSCI EAFE | SPDR MSCI vs. SPDR MSCI World | SPDR MSCI vs. SPDR MSCI USA | SPDR MSCI vs. SPDR MSCI Emerging |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |