Correlation Between Franklin Emerging and Virtus High
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Virtus 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 Virtus 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 Virtus High Yield, you can compare the effects of market volatilities on Franklin Emerging and Virtus 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 Virtus High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Virtus High.
Diversification Opportunities for Franklin Emerging and Virtus High
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Virtus is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Virtus High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus 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 Virtus High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus High Yield has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Virtus High go up and down completely randomly.
Pair Corralation between Franklin Emerging and Virtus High
Assuming the 90 days horizon Franklin Emerging Market is expected to generate 0.94 times more return on investment than Virtus High. However, Franklin Emerging Market is 1.06 times less risky than Virtus High. It trades about 0.17 of its potential returns per unit of risk. Virtus High Yield is currently generating about 0.14 per unit of risk. If you would invest 919.00 in Franklin Emerging Market on November 5, 2024 and sell it today you would earn a total of 257.00 from holding Franklin Emerging Market or generate 27.97% 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. Virtus High Yield
Performance |
| Timeline |
| Franklin Emerging Market |
| Virtus High Yield |
Franklin Emerging and Virtus High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Virtus High
The main advantage of trading using opposite Franklin Emerging and Virtus High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Virtus 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 Virtus High will offset losses from the drop in Virtus High's long position.| Franklin Emerging vs. Versatile Bond Portfolio | Franklin Emerging vs. Ab Bond Inflation | Franklin Emerging vs. Pace Municipal Fixed | Franklin Emerging vs. California Municipal Portfolio |
| Virtus High vs. The Gabelli Healthcare | Virtus High vs. Baron Health Care | Virtus High vs. Allianzgi Health Sciences | Virtus High vs. Highland Longshort Healthcare |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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