Correlation Between Ashmore Emerging and Franklin Government
Can any of the company-specific risk be diversified away by investing in both Ashmore Emerging and Franklin Government 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 Government 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 Government Money, you can compare the effects of market volatilities on Ashmore Emerging and Franklin Government 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 Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Emerging and Franklin Government.
Diversification Opportunities for Ashmore Emerging and Franklin Government
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ashmore and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Emerging Markets and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money 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 Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Ashmore Emerging i.e., Ashmore Emerging and Franklin Government go up and down completely randomly.
Pair Corralation between Ashmore Emerging and Franklin Government
Assuming the 90 days horizon Ashmore Emerging is expected to generate 1.04 times less return on investment than Franklin Government. But when comparing it to its historical volatility, Ashmore Emerging Markets is 1.25 times less risky than Franklin Government. It trades about 0.15 of its potential returns per unit of risk. Franklin Government Money is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 98.00 in Franklin Government Money on October 22, 2024 and sell it today you would earn a total of 2.00 from holding Franklin Government Money or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashmore Emerging Markets vs. Franklin Government Money
Performance |
| Timeline |
| Ashmore Emerging Markets |
| Franklin Government Money |
Ashmore Emerging and Franklin Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Emerging and Franklin Government
The main advantage of trading using opposite Ashmore Emerging and Franklin Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Emerging position performs unexpectedly, Franklin Government 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 Government will offset losses from the drop in Franklin Government's long position.| Ashmore Emerging vs. Fidelity New Markets | Ashmore Emerging vs. Fidelity New Markets | Ashmore Emerging vs. Fidelity New Markets | Ashmore Emerging vs. Fidelity New Markets |
| Franklin Government vs. Ambrus Core Bond | Franklin Government vs. Georgia Tax Free Bond | Franklin Government vs. Dws Government Money | Franklin Government vs. Nuveen Strategic Municipal |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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