Correlation Between Franklin Emerging and Barings Global
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Barings 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 Barings 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 Barings Global Floating, you can compare the effects of market volatilities on Franklin Emerging and Barings 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 Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Barings Global.
Diversification Opportunities for Franklin Emerging and Barings Global
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Barings is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Barings Global Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Floating 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 Barings Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Global Floating has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Barings Global go up and down completely randomly.
Pair Corralation between Franklin Emerging and Barings Global
Assuming the 90 days horizon Franklin Emerging Market is expected to generate 1.67 times more return on investment than Barings Global. However, Franklin Emerging is 1.67 times more volatile than Barings Global Floating. It trades about 0.18 of its potential returns per unit of risk. Barings Global Floating is currently generating about 0.21 per unit of risk. If you would invest 930.00 in Franklin Emerging Market on August 27, 2024 and sell it today you would earn a total of 283.00 from holding Franklin Emerging Market or generate 30.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Emerging Market vs. Barings Global Floating
Performance |
| Timeline |
| Franklin Emerging Market |
| Barings Global Floating |
Franklin Emerging and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Barings Global
The main advantage of trading using opposite Franklin Emerging and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Barings 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 Barings Global will offset losses from the drop in Barings Global's long position.| Franklin Emerging vs. Chartwell Short Duration | Franklin Emerging vs. Ultra Short Term Fixed | Franklin Emerging vs. Maryland Tax Free Bond | Franklin Emerging vs. Bbh Intermediate Municipal |
| Barings Global vs. Barings Active Short | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Active Short |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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