Correlation Between Franklin Income and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both Franklin Income and Stone Harbor 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 Income and Stone Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Income Fund and Stone Harbor Emerging, you can compare the effects of market volatilities on Franklin Income and Stone Harbor 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 Income with a short position of Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Income and Stone Harbor.
Diversification Opportunities for Franklin Income and Stone Harbor
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Stone is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Income Fund and Stone Harbor Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Harbor Emerging and Franklin Income 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 Income Fund are associated (or correlated) with Stone Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Harbor Emerging has no effect on the direction of Franklin Income i.e., Franklin Income and Stone Harbor go up and down completely randomly.
Pair Corralation between Franklin Income and Stone Harbor
Assuming the 90 days horizon Franklin Income is expected to generate 1.03 times less return on investment than Stone Harbor. In addition to that, Franklin Income is 1.1 times more volatile than Stone Harbor Emerging. It trades about 0.14 of its total potential returns per unit of risk. Stone Harbor Emerging is currently generating about 0.16 per unit of volatility. If you would invest 659.00 in Stone Harbor Emerging on September 4, 2024 and sell it today you would earn a total of 91.00 from holding Stone Harbor Emerging or generate 13.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Franklin Income Fund vs. Stone Harbor Emerging
Performance |
| Timeline |
| Franklin Income |
| Stone Harbor Emerging |
Franklin Income and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Income and Stone Harbor
The main advantage of trading using opposite Franklin Income and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Income position performs unexpectedly, Stone Harbor 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 Stone Harbor will offset losses from the drop in Stone Harbor's long position.| Franklin Income vs. Franklin Mutual Beacon | Franklin Income vs. Templeton Developing Markets | Franklin Income vs. Franklin Mutual Global | Franklin Income vs. Franklin Mutual Global |
| Stone Harbor vs. Stone Harbor Local | Stone Harbor vs. Vanguard 500 Index | Stone Harbor vs. Vanguard Equity Income | Stone Harbor vs. Harbor Small Cap |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |