Correlation Between Pacer Benchmark and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both Pacer Benchmark 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 Pacer Benchmark and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacer Benchmark Industrial and Franklin FTSE Europe, you can compare the effects of market volatilities on Pacer Benchmark 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 Pacer Benchmark with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Benchmark and Franklin FTSE.
Diversification Opportunities for Pacer Benchmark and Franklin FTSE
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pacer and Franklin is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Benchmark Industrial and Franklin FTSE Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Europe and Pacer Benchmark 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 Pacer Benchmark Industrial 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 Europe has no effect on the direction of Pacer Benchmark i.e., Pacer Benchmark and Franklin FTSE go up and down completely randomly.
Pair Corralation between Pacer Benchmark and Franklin FTSE
Given the investment horizon of 90 days Pacer Benchmark Industrial is expected to generate 1.4 times more return on investment than Franklin FTSE. However, Pacer Benchmark is 1.4 times more volatile than Franklin FTSE Europe. It trades about 0.38 of its potential returns per unit of risk. Franklin FTSE Europe is currently generating about 0.24 per unit of risk. If you would invest 3,700 in Pacer Benchmark Industrial on July 28, 2025 and sell it today you would earn a total of 256.00 from holding Pacer Benchmark Industrial or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacer Benchmark Industrial vs. Franklin FTSE Europe
Performance |
| Timeline |
| Pacer Benchmark Indu |
| Franklin FTSE Europe |
Pacer Benchmark and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Benchmark and Franklin FTSE
The main advantage of trading using opposite Pacer Benchmark and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Benchmark 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.| Pacer Benchmark vs. Amplify Seymour Cannabis | Pacer Benchmark vs. Xtrackers National Critical | Pacer Benchmark vs. Procure Space ETF | Pacer Benchmark vs. Cabana Target Leading |
| Franklin FTSE vs. Goldman Sachs ActiveBeta | Franklin FTSE vs. Innovator ETFs Trust | Franklin FTSE vs. iShares Genomics Immunology | Franklin FTSE vs. Xtrackers National Critical |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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