Correlation Between Shelton Emerging and Franklin New
Can any of the company-specific risk be diversified away by investing in both Shelton Emerging and Franklin New 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 Shelton Emerging and Franklin New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelton Emerging Markets and Franklin New York, you can compare the effects of market volatilities on Shelton Emerging and Franklin New 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 Shelton Emerging with a short position of Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Emerging and Franklin New.
Diversification Opportunities for Shelton Emerging and Franklin New
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shelton and Franklin is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Emerging Markets and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York and Shelton 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 Shelton Emerging Markets are associated (or correlated) with Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Shelton Emerging i.e., Shelton Emerging and Franklin New go up and down completely randomly.
Pair Corralation between Shelton Emerging and Franklin New
Assuming the 90 days horizon Shelton Emerging Markets is expected to under-perform the Franklin New. In addition to that, Shelton Emerging is 9.78 times more volatile than Franklin New York. It trades about -0.18 of its total potential returns per unit of risk. Franklin New York is currently generating about 0.43 per unit of volatility. If you would invest 1,079 in Franklin New York on September 12, 2024 and sell it today you would earn a total of 10.00 from holding Franklin New York or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shelton Emerging Markets vs. Franklin New York
Performance |
| Timeline |
| Shelton Emerging Markets |
| Franklin New York |
Shelton Emerging and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelton Emerging and Franklin New
The main advantage of trading using opposite Shelton Emerging and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Emerging position performs unexpectedly, Franklin New 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 New will offset losses from the drop in Franklin New's long position.| Shelton Emerging vs. American Funds New | Shelton Emerging vs. SCOR PK | Shelton Emerging vs. Morningstar Unconstrained Allocation | Shelton Emerging vs. Via Renewables |
| Franklin New vs. Siit Emerging Markets | Franklin New vs. Transamerica Emerging Markets | Franklin New vs. Shelton Emerging Markets | Franklin New vs. Locorr Market Trend |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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