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 Canada and Franklin FTSE United, 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
The 3 months correlation between Franklin and Franklin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Franklin FTSE Canada and Franklin FTSE United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE United 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 Canada 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 United 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 is expected to generate 4.71 times less return on investment than Franklin FTSE. In addition to that, Franklin FTSE is 1.26 times more volatile than Franklin FTSE United. It trades about 0.04 of its total potential returns per unit of risk. Franklin FTSE United is currently generating about 0.23 per unit of volatility. If you would invest 2,525 in Franklin FTSE United on March 6, 2024 and sell it today you would earn a total of 228.00 from holding Franklin FTSE United or generate 9.03% return on investment over 90 days.
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin FTSE Canada are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Franklin FTSE is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin FTSE United are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Franklin FTSE may actually be approaching a critical reversion point that can send shares even higher in July 2024.