Correlation Between Franklin Emerging and Columbia Capital
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Columbia Capital 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 Columbia Capital 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 Columbia Capital Allocation, you can compare the effects of market volatilities on Franklin Emerging and Columbia Capital 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 Columbia Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Columbia Capital.
Diversification Opportunities for Franklin Emerging and Columbia Capital
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Columbia is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Columbia Capital Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Capital All 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 Columbia Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Capital All has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Columbia Capital go up and down completely randomly.
Pair Corralation between Franklin Emerging and Columbia Capital
Assuming the 90 days horizon Franklin Emerging Market is expected to generate 0.59 times more return on investment than Columbia Capital. However, Franklin Emerging Market is 1.69 times less risky than Columbia Capital. It trades about 0.26 of its potential returns per unit of risk. Columbia Capital Allocation is currently generating about 0.05 per unit of risk. If you would invest 1,152 in Franklin Emerging Market on October 23, 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. Columbia Capital Allocation
Performance |
| Timeline |
| Franklin Emerging Market |
| Columbia Capital All |
Franklin Emerging and Columbia Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Columbia Capital
The main advantage of trading using opposite Franklin Emerging and Columbia Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Columbia Capital 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 Columbia Capital will offset losses from the drop in Columbia Capital's long position.| Franklin Emerging vs. Iaadx | Franklin Emerging vs. Wmcapx | Franklin Emerging vs. Rbb Fund | Franklin Emerging vs. Fpddjx |
| Columbia Capital vs. Aqr Sustainable Long Short | Columbia Capital vs. Sp Midcap Index | Columbia Capital vs. Franklin Emerging Market | Columbia Capital vs. Siit 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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