Correlation Between Franklin Emerging and Eventide Large
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Eventide Large 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 Eventide Large 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 Eventide Large Cap, you can compare the effects of market volatilities on Franklin Emerging and Eventide Large 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 Eventide Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Eventide Large.
Diversification Opportunities for Franklin Emerging and Eventide Large
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Eventide is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Eventide Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Large Cap 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 Eventide Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Large Cap has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Eventide Large go up and down completely randomly.
Pair Corralation between Franklin Emerging and Eventide Large
Assuming the 90 days horizon Franklin Emerging Market is expected to generate 0.28 times more return on investment than Eventide Large. However, Franklin Emerging Market is 3.63 times less risky than Eventide Large. It trades about 0.24 of its potential returns per unit of risk. Eventide Large Cap is currently generating about -0.06 per unit of risk. If you would invest 1,208 in Franklin Emerging Market on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Franklin Emerging Market or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Emerging Market vs. Eventide Large Cap
Performance |
| Timeline |
| Franklin Emerging Market |
| Eventide Large Cap |
Franklin Emerging and Eventide Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Eventide Large
The main advantage of trading using opposite Franklin Emerging and Eventide Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Eventide Large 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 Eventide Large will offset losses from the drop in Eventide Large's long position.| Franklin Emerging vs. Health Biotchnology Portfolio | Franklin Emerging vs. Deutsche Health And | Franklin Emerging vs. Baron Health Care | Franklin Emerging vs. Prudential Health Sciences |
| Eventide Large vs. Hennessy Technology Fund | Eventide Large vs. Technology Ultrasector Profund | Eventide Large vs. Goldman Sachs Technology | Eventide Large vs. Biotechnology Ultrasector Profund |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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