Correlation Between Franklin Emerging and Aberdeen Global
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Aberdeen Global 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 Franklin Emerging and Aberdeen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Emerging Market and Aberdeen Global Dynamic, you can compare the effects of market volatilities on Franklin Emerging and Aberdeen Global 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 Franklin Emerging with a short position of Aberdeen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Aberdeen Global.
Diversification Opportunities for Franklin Emerging and Aberdeen Global
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Aberdeen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Aberdeen Global Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global Dynamic and Franklin 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 Franklin Emerging Market are associated (or correlated) with Aberdeen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Global Dynamic has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Aberdeen Global go up and down completely randomly.
Pair Corralation between Franklin Emerging and Aberdeen Global
Assuming the 90 days horizon Franklin Emerging Market is expected to generate 0.37 times more return on investment than Aberdeen Global. However, Franklin Emerging Market is 2.69 times less risky than Aberdeen Global. It trades about 0.18 of its potential returns per unit of risk. Aberdeen Global Dynamic is currently generating about -0.12 per unit of risk. If you would invest 1,202 in Franklin Emerging Market on August 25, 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Emerging Market vs. Aberdeen Global Dynamic
Performance |
| Timeline |
| Franklin Emerging Market |
| Aberdeen Global Dynamic |
Franklin Emerging and Aberdeen Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Aberdeen Global
The main advantage of trading using opposite Franklin Emerging and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Aberdeen Global 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 Aberdeen Global will offset losses from the drop in Aberdeen Global's long position.| Franklin Emerging vs. Nuveen Winslow Large Cap | Franklin Emerging vs. Siit Large Cap | Franklin Emerging vs. William Blair Large | Franklin Emerging vs. Massmutual Select T |
| Aberdeen Global vs. MFS Investment Grade | Aberdeen Global vs. Eaton Vance National | Aberdeen Global vs. Blackrock Muniyield Quality | Aberdeen Global vs. DTF Tax Free |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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