Correlation Between Franklin Emerging and Lsv Global
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Lsv Global 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 Lsv Global 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 Lsv Global Value, you can compare the effects of market volatilities on Franklin Emerging and Lsv Global 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 Lsv Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Lsv Global.
Diversification Opportunities for Franklin Emerging and Lsv Global
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Lsv is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Lsv Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Global Value 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 Lsv Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsv Global Value has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Lsv Global go up and down completely randomly.
Pair Corralation between Franklin Emerging and Lsv Global
Assuming the 90 days horizon Franklin Emerging is expected to generate 1.08 times less return on investment than Lsv Global. But when comparing it to its historical volatility, Franklin Emerging Market is 2.66 times less risky than Lsv Global. It trades about 0.17 of its potential returns per unit of risk. Lsv Global Value is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,229 in Lsv Global Value on August 27, 2024 and sell it today you would earn a total of 320.00 from holding Lsv Global Value or generate 26.04% 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. Lsv Global Value
Performance |
| Timeline |
| Franklin Emerging Market |
| Lsv Global Value |
Franklin Emerging and Lsv Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Lsv Global
The main advantage of trading using opposite Franklin Emerging and Lsv Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Lsv Global 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 Lsv Global will offset losses from the drop in Lsv Global'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 |
| Lsv Global vs. Chautauqua Global Growth | Lsv Global vs. Causeway Global Value | Lsv Global vs. Ariel Global Fund | Lsv Global vs. Artisan 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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