Correlation Between Franklin New and Glg Intl
Can any of the company-specific risk be diversified away by investing in both Franklin New and Glg Intl 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 New and Glg Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin New Jersey and Glg Intl Small, you can compare the effects of market volatilities on Franklin New and Glg Intl 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 New with a short position of Glg Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin New and Glg Intl.
Diversification Opportunities for Franklin New and Glg Intl
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and Glg is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Franklin New Jersey and Glg Intl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glg Intl Small and Franklin New 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 New Jersey are associated (or correlated) with Glg Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glg Intl Small has no effect on the direction of Franklin New i.e., Franklin New and Glg Intl go up and down completely randomly.
Pair Corralation between Franklin New and Glg Intl
Assuming the 90 days horizon Franklin New is expected to generate 9.59 times less return on investment than Glg Intl. But when comparing it to its historical volatility, Franklin New Jersey is 4.69 times less risky than Glg Intl. It trades about 0.04 of its potential returns per unit of risk. Glg Intl Small is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,576 in Glg Intl Small on October 9, 2024 and sell it today you would earn a total of 2,959 from holding Glg Intl Small or generate 53.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin New Jersey vs. Glg Intl Small
Performance |
| Timeline |
| Franklin New Jersey |
| Glg Intl Small |
Franklin New and Glg Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin New and Glg Intl
The main advantage of trading using opposite Franklin New and Glg Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin New position performs unexpectedly, Glg Intl 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 Glg Intl will offset losses from the drop in Glg Intl's long position.| Franklin New vs. Franklin Mutual Beacon | Franklin New vs. Templeton Developing Markets | Franklin New vs. Franklin Mutual Global | Franklin New vs. Franklin Mutual Global |
| Glg Intl vs. Short Real Estate | Glg Intl vs. Pender Real Estate | Glg Intl vs. Prudential Real Estate | Glg Intl vs. Baron 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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