Correlation Between Franklin Emerging and Jpmorgan Mid
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Jpmorgan Mid 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 Jpmorgan Mid 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 Jpmorgan Mid Cap, you can compare the effects of market volatilities on Franklin Emerging and Jpmorgan Mid 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 Jpmorgan Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Jpmorgan Mid.
Diversification Opportunities for Franklin Emerging and Jpmorgan Mid
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Jpmorgan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Jpmorgan Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Mid 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 Jpmorgan Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Mid Cap has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Jpmorgan Mid go up and down completely randomly.
Pair Corralation between Franklin Emerging and Jpmorgan Mid
Assuming the 90 days horizon Franklin Emerging Market is expected to generate 0.34 times more return on investment than Jpmorgan Mid. However, Franklin Emerging Market is 2.96 times less risky than Jpmorgan Mid. It trades about 0.17 of its potential returns per unit of risk. Jpmorgan Mid Cap is currently generating about 0.05 per unit of risk. If you would invest 968.00 in Franklin Emerging Market on August 27, 2024 and sell it today you would earn a total of 245.00 from holding Franklin Emerging Market or generate 25.31% 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. Jpmorgan Mid Cap
Performance |
| Timeline |
| Franklin Emerging Market |
| Jpmorgan Mid Cap |
Franklin Emerging and Jpmorgan Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Jpmorgan Mid
The main advantage of trading using opposite Franklin Emerging and Jpmorgan Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Jpmorgan Mid 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 Jpmorgan Mid will offset losses from the drop in Jpmorgan Mid'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 |
| Jpmorgan Mid vs. Lord Abbett Vertible | Jpmorgan Mid vs. Columbia Vertible Securities | Jpmorgan Mid vs. Gabelli Convertible And | Jpmorgan Mid vs. Franklin Vertible Securities |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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