Correlation Between Franklin Emerging and Hotchkis Wiley
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Hotchkis Wiley 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 Hotchkis Wiley 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 Hotchkis Wiley Small, you can compare the effects of market volatilities on Franklin Emerging and Hotchkis Wiley 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 Hotchkis Wiley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Hotchkis Wiley.
Diversification Opportunities for Franklin Emerging and Hotchkis Wiley
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Hotchkis is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Hotchkis Wiley Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotchkis Wiley Small 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 Hotchkis Wiley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotchkis Wiley Small has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Hotchkis Wiley go up and down completely randomly.
Pair Corralation between Franklin Emerging and Hotchkis Wiley
Assuming the 90 days horizon Franklin Emerging is expected to generate 8.75 times less return on investment than Hotchkis Wiley. But when comparing it to its historical volatility, Franklin Emerging Market is 8.15 times less risky than Hotchkis Wiley. It trades about 0.25 of its potential returns per unit of risk. Hotchkis Wiley Small is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,278 in Hotchkis Wiley Small on September 3, 2024 and sell it today you would earn a total of 132.00 from holding Hotchkis Wiley Small or generate 10.33% 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. Hotchkis Wiley Small
Performance |
| Timeline |
| Franklin Emerging Market |
| Hotchkis Wiley Small |
Franklin Emerging and Hotchkis Wiley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Hotchkis Wiley
The main advantage of trading using opposite Franklin Emerging and Hotchkis Wiley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Hotchkis Wiley 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 Hotchkis Wiley will offset losses from the drop in Hotchkis Wiley's long position.| Franklin Emerging vs. Iaadx | Franklin Emerging vs. Sei Daily Income | Franklin Emerging vs. Fa 529 Aggressive | Franklin Emerging vs. Arrow Managed Futures |
| Hotchkis Wiley vs. Vanguard Small Cap Value | Hotchkis Wiley vs. Vanguard Small Cap Value | Hotchkis Wiley vs. Us Small Cap | Hotchkis Wiley vs. Us Targeted Value |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |