Correlation Between Altegris Futures and Franklin Emerging
Can any of the company-specific risk be diversified away by investing in both Altegris Futures 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 Altegris Futures and Franklin Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altegris Futures Evolution and Franklin Emerging Market, you can compare the effects of market volatilities on Altegris Futures 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 Altegris Futures with a short position of Franklin Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altegris Futures and Franklin Emerging.
Diversification Opportunities for Altegris Futures and Franklin Emerging
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Altegris and Franklin is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Altegris Futures Evolution 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 Altegris Futures 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 Altegris Futures Evolution 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 Altegris Futures i.e., Altegris Futures and Franklin Emerging go up and down completely randomly.
Pair Corralation between Altegris Futures and Franklin Emerging
Assuming the 90 days horizon Altegris Futures Evolution is expected to under-perform the Franklin Emerging. In addition to that, Altegris Futures is 2.38 times more volatile than Franklin Emerging Market. It trades about -0.1 of its total potential returns per unit of risk. Franklin Emerging Market is currently generating about 0.26 per unit of volatility. If you would invest 1,200 in Franklin Emerging Market on September 2, 2024 and sell it today you would earn a total of 15.00 from holding Franklin Emerging Market or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altegris Futures Evolution vs. Franklin Emerging Market
Performance |
| Timeline |
| Altegris Futures Evo |
| Franklin Emerging Market |
Altegris Futures and Franklin Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altegris Futures and Franklin Emerging
The main advantage of trading using opposite Altegris Futures and Franklin Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altegris Futures 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.| Altegris Futures vs. Franklin Emerging Market | Altegris Futures vs. Transamerica Emerging Markets | Altegris Futures vs. Rbc Emerging Markets | Altegris Futures vs. Ashmore Emerging Markets |
| Franklin Emerging vs. Delaware Limited Term Diversified | Franklin Emerging vs. The Gabelli Small | Franklin Emerging vs. Harbor Diversified International | Franklin Emerging vs. Western Asset Diversified |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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