Correlation Between Franklin Emerging and Baird Strategic
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Baird Strategic 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 Baird Strategic 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 Baird Strategic Municipal, you can compare the effects of market volatilities on Franklin Emerging and Baird Strategic 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 Baird Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Baird Strategic.
Diversification Opportunities for Franklin Emerging and Baird Strategic
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Baird is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Baird Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Strategic Municipal 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 Baird Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Strategic Municipal has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Baird Strategic go up and down completely randomly.
Pair Corralation between Franklin Emerging and Baird Strategic
Assuming the 90 days horizon Franklin Emerging Market is expected to generate 1.88 times more return on investment than Baird Strategic. However, Franklin Emerging is 1.88 times more volatile than Baird Strategic Municipal. It trades about 0.23 of its potential returns per unit of risk. Baird Strategic Municipal is currently generating about 0.13 per unit of risk. If you would invest 954.00 in Franklin Emerging Market on August 31, 2024 and sell it today you would earn a total of 261.00 from holding Franklin Emerging Market or generate 27.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Emerging Market vs. Baird Strategic Municipal
Performance |
| Timeline |
| Franklin Emerging Market |
| Baird Strategic Municipal |
Franklin Emerging and Baird Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Baird Strategic
The main advantage of trading using opposite Franklin Emerging and Baird Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Baird Strategic 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 Baird Strategic will offset losses from the drop in Baird Strategic's long position.| Franklin Emerging vs. T Rowe Price | Franklin Emerging vs. Morningstar Unconstrained Allocation | Franklin Emerging vs. Goldman Sachs Large | Franklin Emerging vs. Federated Kaufmann Large |
| Baird Strategic vs. Federated Ohio Municipal | Baird Strategic vs. Versatile Bond Portfolio | Baird Strategic vs. Artisan High Income | Baird Strategic 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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