Correlation Between Ashmore Emerging and Franklin Dynatech
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Franklin Dynatech 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 Ashmore Emerging and Franklin Dynatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashmore Emerging Markets and Franklin Dynatech Fund, you can compare the effects of market volatilities on Ashmore Emerging and Franklin Dynatech 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 Ashmore Emerging with a short position of Franklin Dynatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Franklin Dynatech.
Diversification Opportunities for Ashmore Emerging and Franklin Dynatech
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ashmore and Franklin is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Franklin Dynatech Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Dynatech and Ashmore 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 Ashmore Emerging Markets are associated (or correlated) with Franklin Dynatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Dynatech has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Franklin Dynatech go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Franklin Dynatech
Assuming the 90 days horizon Ashmore Emerging is expected to generate 2.56 times less return on investment than Franklin Dynatech. But when comparing it to its historical volatility, Ashmore Emerging Markets is 5.89 times less risky than Franklin Dynatech. It trades about 0.24 of its potential returns per unit of risk. Franklin Dynatech Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 10,150 in Franklin Dynatech Fund on September 14, 2024 and sell it today you would earn a total of 4,182 from holding Franklin Dynatech Fund or generate 41.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Franklin Dynatech Fund
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Franklin Dynatech |
Ashmore Emerging and Franklin Dynatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Franklin Dynatech
The main advantage of trading using opposite Ashmore Emerging and Franklin Dynatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Franklin Dynatech 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 Dynatech will offset losses from the drop in Franklin Dynatech's long position.| Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets |
| Franklin Dynatech vs. Ashmore Emerging Markets | Franklin Dynatech vs. Calvert Emerging Markets | Franklin Dynatech vs. Rbc Emerging Markets | Franklin Dynatech vs. Siit 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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