Correlation Between Franklin Emerging and Global Real
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Global Real 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 Global Real 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 Global Real Estate, you can compare the effects of market volatilities on Franklin Emerging and Global Real 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 Global Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Global Real.
Diversification Opportunities for Franklin Emerging and Global Real
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Global is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Global Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Real Estate 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 Global Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Real Estate has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Global Real go up and down completely randomly.
Pair Corralation between Franklin Emerging and Global Real
Assuming the 90 days horizon Franklin Emerging Market is expected to generate 0.3 times more return on investment than Global Real. However, Franklin Emerging Market is 3.39 times less risky than Global Real. It trades about 0.21 of its potential returns per unit of risk. Global Real Estate is currently generating about 0.05 per unit of risk. If you would invest 981.00 in Franklin Emerging Market on August 28, 2024 and sell it today you would earn a total of 234.00 from holding Franklin Emerging Market or generate 23.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Emerging Market vs. Global Real Estate
Performance |
| Timeline |
| Franklin Emerging Market |
| Global Real Estate |
Franklin Emerging and Global Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Global Real
The main advantage of trading using opposite Franklin Emerging and Global Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Global Real 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 Global Real will offset losses from the drop in Global Real's long position.| Franklin Emerging vs. Franklin Mutual Beacon | Franklin Emerging vs. Templeton Developing Markets | Franklin Emerging vs. Franklin Mutual Global | Franklin Emerging vs. Franklin Mutual Global |
| Global Real vs. Mid Cap Index | Global Real vs. Mid Cap Strategic | Global Real vs. Valic Company I | Global Real vs. Valic Company I |
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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