Correlation Between Franklin Emerging and Qs Moderate
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Qs Moderate 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 Qs Moderate 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 Qs Moderate Growth, you can compare the effects of market volatilities on Franklin Emerging and Qs Moderate 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 Qs Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Qs Moderate.
Diversification Opportunities for Franklin Emerging and Qs Moderate
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and LLAIX is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Qs Moderate Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs Moderate Growth 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 Qs Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs Moderate Growth has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Qs Moderate go up and down completely randomly.
Pair Corralation between Franklin Emerging and Qs Moderate
Assuming the 90 days horizon Franklin Emerging Market is expected to generate 0.69 times more return on investment than Qs Moderate. However, Franklin Emerging Market is 1.45 times less risky than Qs Moderate. It trades about -0.26 of its potential returns per unit of risk. Qs Moderate Growth is currently generating about -0.28 per unit of risk. If you would invest 1,220 in Franklin Emerging Market on October 12, 2024 and sell it today you would lose (61.00) from holding Franklin Emerging Market or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Emerging Market vs. Qs Moderate Growth
Performance |
| Timeline |
| Franklin Emerging Market |
| Qs Moderate Growth |
Franklin Emerging and Qs Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Qs Moderate
The main advantage of trading using opposite Franklin Emerging and Qs Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Qs Moderate 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 Qs Moderate will offset losses from the drop in Qs Moderate's long position.| Franklin Emerging vs. Profunds Large Cap Growth | Franklin Emerging vs. Americafirst Large Cap | Franklin Emerging vs. M Large Cap | Franklin Emerging vs. Qs Large Cap |
| Qs Moderate vs. Gmo Resources | Qs Moderate vs. Invesco Energy Fund | Qs Moderate vs. Jennison Natural Resources | Qs Moderate vs. Alpsalerian Energy Infrastructure |
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
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Global Correlations Find global opportunities by holding instruments from different markets |