Correlation Between Franklin Emerging and Pimco High
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Pimco High 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 Pimco High 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 Pimco High Yield, you can compare the effects of market volatilities on Franklin Emerging and Pimco High 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 Pimco High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Pimco High.
Diversification Opportunities for Franklin Emerging and Pimco High
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Pimco is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Pimco High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco High Yield 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 Pimco High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco High Yield has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Pimco High go up and down completely randomly.
Pair Corralation between Franklin Emerging and Pimco High
Assuming the 90 days horizon Franklin Emerging Market is expected to generate 0.91 times more return on investment than Pimco High. However, Franklin Emerging Market is 1.1 times less risky than Pimco High. It trades about 0.26 of its potential returns per unit of risk. Pimco High Yield is currently generating about 0.06 per unit of risk. If you would invest 1,152 in Franklin Emerging Market on October 24, 2024 and sell it today you would earn a total of 12.00 from holding Franklin Emerging Market or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Emerging Market vs. Pimco High Yield
Performance |
| Timeline |
| Franklin Emerging Market |
| Pimco High Yield |
Franklin Emerging and Pimco High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Pimco High
The main advantage of trading using opposite Franklin Emerging and Pimco High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Pimco High 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 Pimco High will offset losses from the drop in Pimco High's long position.| Franklin Emerging vs. Alger Health Sciences | Franklin Emerging vs. Highland Longshort Healthcare | Franklin Emerging vs. Alphacentric Lifesci Healthcare | Franklin Emerging vs. Allianzgi Health Sciences |
| Pimco High vs. Guggenheim Managed Futures | Pimco High vs. Cref Inflation Linked Bond | Pimco High vs. Atac Inflation Rotation | Pimco High vs. Credit Suisse Managed |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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