Correlation Between Ashmore Emerging and Franklin Emerging
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Franklin 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 Ashmore Emerging and Franklin Emerging 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 Emerging Market, you can compare the effects of market volatilities on Ashmore Emerging and Franklin 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 Ashmore Emerging with a short position of Franklin Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Franklin Emerging.
Diversification Opportunities for Ashmore Emerging and Franklin Emerging
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ashmore and Franklin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Franklin Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Emerging Market 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 Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Emerging Market has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Franklin Emerging go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Franklin Emerging
Assuming the 90 days horizon Ashmore Emerging is expected to generate 5.35 times less return on investment than Franklin Emerging. But when comparing it to its historical volatility, Ashmore Emerging Markets is 1.16 times less risky than Franklin Emerging. It trades about 0.04 of its potential returns per unit of risk. Franklin Emerging Market is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,201 in Franklin Emerging Market on August 23, 2024 and sell it today you would earn a total of 11.00 from holding Franklin Emerging Market or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Franklin Emerging Market
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Franklin Emerging Market |
Ashmore Emerging and Franklin Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Franklin Emerging
The main advantage of trading using opposite Ashmore Emerging and Franklin Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Franklin 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 Franklin Emerging will offset losses from the drop in Franklin Emerging's long position.| Ashmore Emerging vs. Calvert High Yield | Ashmore Emerging vs. Ab Global Risk | Ashmore Emerging vs. Lgm Risk Managed | Ashmore Emerging vs. Siit High Yield |
| Franklin Emerging vs. California Bond Fund | Franklin Emerging vs. Multisector Bond Sma | Franklin Emerging vs. Dws Communications | Franklin Emerging vs. Transamerica Intermediate Muni |
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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