Correlation Between Franklin Emerging and Wmcanx
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Wmcanx 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 Wmcanx 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 Wmcanx, you can compare the effects of market volatilities on Franklin Emerging and Wmcanx 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 Wmcanx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Wmcanx.
Diversification Opportunities for Franklin Emerging and Wmcanx
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Wmcanx is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Wmcanx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wmcanx 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 Wmcanx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wmcanx has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Wmcanx go up and down completely randomly.
Pair Corralation between Franklin Emerging and Wmcanx
Assuming the 90 days horizon Franklin Emerging is expected to generate 1.81 times less return on investment than Wmcanx. But when comparing it to its historical volatility, Franklin Emerging Market is 3.08 times less risky than Wmcanx. It trades about 0.36 of its potential returns per unit of risk. Wmcanx is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,656 in Wmcanx on November 3, 2024 and sell it today you would earn a total of 49.00 from holding Wmcanx or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Emerging Market vs. Wmcanx
Performance |
| Timeline |
| Franklin Emerging Market |
| Wmcanx |
Franklin Emerging and Wmcanx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Wmcanx
The main advantage of trading using opposite Franklin Emerging and Wmcanx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Wmcanx 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 Wmcanx will offset losses from the drop in Wmcanx's long position.| Franklin Emerging vs. Lind Capital Partners | Franklin Emerging vs. Old Westbury California | Franklin Emerging vs. California Municipal Portfolio | Franklin Emerging vs. Oklahoma Municipal Fund |
| Wmcanx vs. Short Real Estate | Wmcanx vs. Rreef Property Trust | Wmcanx vs. Prudential Real Estate | Wmcanx vs. Jhancock Real Estate |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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