Correlation Between Doubleline Emerging and Franklin Federal
Can any of the company-specific risk be diversified away by investing in both Doubleline Emerging and Franklin Federal 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 Doubleline Emerging and Franklin Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Doubleline Emerging Markets and Franklin Federal Tax Free, you can compare the effects of market volatilities on Doubleline Emerging and Franklin Federal 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 Doubleline Emerging with a short position of Franklin Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubleline Emerging and Franklin Federal.
Diversification Opportunities for Doubleline Emerging and Franklin Federal
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Doubleline and Franklin is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline Emerging Markets and Franklin Federal Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Federal Tax and Doubleline Emerging 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 Doubleline Emerging Markets are associated (or correlated) with Franklin Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Federal Tax has no effect on the direction of Doubleline Emerging i.e., Doubleline Emerging and Franklin Federal go up and down completely randomly.
Pair Corralation between Doubleline Emerging and Franklin Federal
Assuming the 90 days horizon Doubleline Emerging Markets is expected to under-perform the Franklin Federal. In addition to that, Doubleline Emerging is 1.44 times more volatile than Franklin Federal Tax Free. It trades about -0.03 of its total potential returns per unit of risk. Franklin Federal Tax Free is currently generating about 0.19 per unit of volatility. If you would invest 1,088 in Franklin Federal Tax Free on September 2, 2024 and sell it today you would earn a total of 14.00 from holding Franklin Federal Tax Free or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doubleline Emerging Markets vs. Franklin Federal Tax Free
Performance |
| Timeline |
| Doubleline Emerging |
| Franklin Federal Tax |
Doubleline Emerging and Franklin Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doubleline Emerging and Franklin Federal
The main advantage of trading using opposite Doubleline Emerging and Franklin Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doubleline Emerging position performs unexpectedly, Franklin Federal 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 Federal will offset losses from the drop in Franklin Federal's long position.| Doubleline Emerging vs. Ep Emerging Markets | Doubleline Emerging vs. Harbor Diversified International | Doubleline Emerging vs. Locorr Market Trend | Doubleline Emerging vs. Rbc Emerging Markets |
| Franklin Federal vs. Eagle Mlp Strategy | Franklin Federal vs. Origin Emerging Markets | Franklin Federal vs. Doubleline Emerging Markets | Franklin Federal vs. Ashmore Emerging Markets |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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