Correlation Between Franklin Emerging and Fpa Queens
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Fpa Queens 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 Fpa Queens 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 Fpa Queens Road, you can compare the effects of market volatilities on Franklin Emerging and Fpa Queens 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 Fpa Queens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Fpa Queens.
Diversification Opportunities for Franklin Emerging and Fpa Queens
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Fpa is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Fpa Queens Road in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fpa Queens Road 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 Fpa Queens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fpa Queens Road has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Fpa Queens go up and down completely randomly.
Pair Corralation between Franklin Emerging and Fpa Queens
Assuming the 90 days horizon Franklin Emerging is expected to generate 8.54 times less return on investment than Fpa Queens. But when comparing it to its historical volatility, Franklin Emerging Market is 5.77 times less risky than Fpa Queens. It trades about 0.15 of its potential returns per unit of risk. Fpa Queens Road is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,032 in Fpa Queens Road on August 27, 2024 and sell it today you would earn a total of 258.00 from holding Fpa Queens Road or generate 6.4% 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. Fpa Queens Road
Performance |
| Timeline |
| Franklin Emerging Market |
| Fpa Queens Road |
Franklin Emerging and Fpa Queens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Fpa Queens
The main advantage of trading using opposite Franklin Emerging and Fpa Queens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Fpa Queens 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 Fpa Queens will offset losses from the drop in Fpa Queens' 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 |
| Fpa Queens vs. Pro Blend Moderate Term | Fpa Queens vs. Dimensional Retirement Income | Fpa Queens vs. Target Retirement 2040 | Fpa Queens vs. Lifestyle Ii Moderate |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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