Correlation Between Franklin Emerging and Integrity Growth
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Integrity Growth 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 Integrity Growth 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 Integrity Growth Income, you can compare the effects of market volatilities on Franklin Emerging and Integrity Growth 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 Integrity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Integrity Growth.
Diversification Opportunities for Franklin Emerging and Integrity Growth
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Integrity is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Integrity Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrity Growth Income 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 Integrity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrity Growth Income has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Integrity Growth go up and down completely randomly.
Pair Corralation between Franklin Emerging and Integrity Growth
Assuming the 90 days horizon Franklin Emerging is expected to generate 2.79 times less return on investment than Integrity Growth. But when comparing it to its historical volatility, Franklin Emerging Market is 3.2 times less risky than Integrity Growth. It trades about 0.14 of its potential returns per unit of risk. Integrity Growth Income is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 9,907 in Integrity Growth Income on August 29, 2024 and sell it today you would earn a total of 204.00 from holding Integrity Growth Income or generate 2.06% 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. Integrity Growth Income
Performance |
| Timeline |
| Franklin Emerging Market |
| Integrity Growth Income |
Franklin Emerging and Integrity Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Integrity Growth
The main advantage of trading using opposite Franklin Emerging and Integrity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Integrity Growth 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 Integrity Growth will offset losses from the drop in Integrity Growth's long position.| Franklin Emerging vs. Upright Assets Allocation | Franklin Emerging vs. Qs Large Cap | Franklin Emerging vs. Dodge Cox Stock | Franklin Emerging vs. Strategic Allocation Aggressive |
| Integrity Growth vs. Virtus Real Estate | Integrity Growth vs. Commonwealth Real Estate | Integrity Growth vs. Morgan Stanley Institutional | Integrity Growth vs. American Century Global |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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