Correlation Between Franklin Emerging and Fidelity Salem
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Fidelity Salem 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 Fidelity Salem 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 Fidelity Salem Street, you can compare the effects of market volatilities on Franklin Emerging and Fidelity Salem 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 Fidelity Salem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Fidelity Salem.
Diversification Opportunities for Franklin Emerging and Fidelity Salem
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and Fidelity is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Fidelity Salem Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Salem Street 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 Fidelity Salem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Salem Street has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Fidelity Salem go up and down completely randomly.
Pair Corralation between Franklin Emerging and Fidelity Salem
Assuming the 90 days horizon Franklin Emerging Market is expected to generate 0.27 times more return on investment than Fidelity Salem. However, Franklin Emerging Market is 3.76 times less risky than Fidelity Salem. It trades about 0.25 of its potential returns per unit of risk. Fidelity Salem Street is currently generating about 0.06 per unit of risk. If you would invest 1,045 in Franklin Emerging Market on September 2, 2024 and sell it today you would earn a total of 170.00 from holding Franklin Emerging Market or generate 16.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Emerging Market vs. Fidelity Salem Street
Performance |
| Timeline |
| Franklin Emerging Market |
| Fidelity Salem Street |
Franklin Emerging and Fidelity Salem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Fidelity Salem
The main advantage of trading using opposite Franklin Emerging and Fidelity Salem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Fidelity Salem 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 Fidelity Salem will offset losses from the drop in Fidelity Salem's long position.| 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 |
| Fidelity Salem vs. Angel Oak Multi Strategy | Fidelity Salem vs. Franklin Emerging Market | Fidelity Salem vs. Transamerica Emerging Markets | Fidelity Salem vs. Dws Emerging Markets |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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