Correlation Between Franklin Templeton and IShares Emerging
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and IShares Emerging 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 Templeton and IShares Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton ETF and iShares Emerging Markets, you can compare the effects of market volatilities on Franklin Templeton and IShares Emerging 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 Templeton with a short position of IShares Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and IShares Emerging.
Diversification Opportunities for Franklin Templeton and IShares Emerging
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and IShares is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton ETF and iShares Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Emerging Markets and Franklin Templeton 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 Templeton ETF are associated (or correlated) with IShares Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Emerging Markets has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and IShares Emerging go up and down completely randomly.
Pair Corralation between Franklin Templeton and IShares Emerging
Given the investment horizon of 90 days Franklin Templeton is expected to generate 1.22 times less return on investment than IShares Emerging. But when comparing it to its historical volatility, Franklin Templeton ETF is 1.04 times less risky than IShares Emerging. It trades about 0.04 of its potential returns per unit of risk. iShares Emerging Markets is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,122 in iShares Emerging Markets on October 23, 2024 and sell it today you would earn a total of 482.00 from holding iShares Emerging Markets or generate 22.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton ETF vs. iShares Emerging Markets
Performance |
| Timeline |
| Franklin Templeton ETF |
| iShares Emerging Markets |
Franklin Templeton and IShares Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and IShares Emerging
The main advantage of trading using opposite Franklin Templeton and IShares Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, IShares Emerging 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 IShares Emerging will offset losses from the drop in IShares Emerging's long position.| Franklin Templeton vs. Franklin Core Dividend | Franklin Templeton vs. Franklin International Core | Franklin Templeton vs. WisdomTree Trust | Franklin Templeton vs. First Trust Exchange Traded |
| IShares Emerging vs. Franklin Templeton ETF | IShares Emerging vs. Altrius Global Dividend | IShares Emerging vs. Invesco Exchange Traded | IShares Emerging vs. Franklin International Core |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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