Correlation Between Franklin Emerging and Jpmorgan Smartretirement
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Jpmorgan Smartretirement 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 Jpmorgan Smartretirement 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 Jpmorgan Smartretirement 2035, you can compare the effects of market volatilities on Franklin Emerging and Jpmorgan Smartretirement 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 Jpmorgan Smartretirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Jpmorgan Smartretirement.
Diversification Opportunities for Franklin Emerging and Jpmorgan Smartretirement
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Jpmorgan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Jpmorgan Smartretirement 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Smartretirement 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 Jpmorgan Smartretirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Smartretirement has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Jpmorgan Smartretirement go up and down completely randomly.
Pair Corralation between Franklin Emerging and Jpmorgan Smartretirement
Assuming the 90 days horizon Franklin Emerging is expected to generate 1.15 times less return on investment than Jpmorgan Smartretirement. But when comparing it to its historical volatility, Franklin Emerging Market is 1.83 times less risky than Jpmorgan Smartretirement. It trades about 0.22 of its potential returns per unit of risk. Jpmorgan Smartretirement 2035 is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,111 in Jpmorgan Smartretirement 2035 on September 14, 2024 and sell it today you would earn a total of 22.00 from holding Jpmorgan Smartretirement 2035 or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Emerging Market vs. Jpmorgan Smartretirement 2035
Performance |
| Timeline |
| Franklin Emerging Market |
| Jpmorgan Smartretirement |
Franklin Emerging and Jpmorgan Smartretirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Jpmorgan Smartretirement
The main advantage of trading using opposite Franklin Emerging and Jpmorgan Smartretirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Jpmorgan Smartretirement 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 Jpmorgan Smartretirement will offset losses from the drop in Jpmorgan Smartretirement's long position.| Franklin Emerging vs. Alger Health Sciences | Franklin Emerging vs. Highland Longshort Healthcare | Franklin Emerging vs. Baron Health Care | Franklin Emerging vs. Tekla Healthcare Opportunities |
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.
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