Correlation Between Franklin Emerging and Pax Core
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Pax Core 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 Pax Core 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 Pax E Bond, you can compare the effects of market volatilities on Franklin Emerging and Pax Core 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 Pax Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Pax Core.
Diversification Opportunities for Franklin Emerging and Pax Core
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Pax is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Pax E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pax E Bond 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 Pax Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pax E Bond has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Pax Core go up and down completely randomly.
Pair Corralation between Franklin Emerging and Pax Core
Assuming the 90 days horizon Franklin Emerging Market is expected to generate 0.7 times more return on investment than Pax Core. However, Franklin Emerging Market is 1.43 times less risky than Pax Core. It trades about 0.22 of its potential returns per unit of risk. Pax E Bond is currently generating about 0.02 per unit of risk. If you would invest 1,077 in Franklin Emerging Market on August 25, 2024 and sell it today you would earn a total of 136.00 from holding Franklin Emerging Market or generate 12.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Emerging Market vs. Pax E Bond
Performance |
| Timeline |
| Franklin Emerging Market |
| Pax E Bond |
Franklin Emerging and Pax Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Pax Core
The main advantage of trading using opposite Franklin Emerging and Pax Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Pax Core 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 Pax Core will offset losses from the drop in Pax Core's long position.| Franklin Emerging vs. Wells Fargo Advantage | Franklin Emerging vs. Gabelli Gold Fund | Franklin Emerging vs. Sprott Gold Equity | Franklin Emerging vs. Fidelity Advisor Gold |
| Pax Core vs. Eagle Mlp Strategy | Pax Core vs. Pace International Emerging | Pax Core vs. Franklin Emerging Market | Pax Core vs. Transamerica 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |