Correlation Between Franklin New and Mondrian Emerging
Can any of the company-specific risk be diversified away by investing in both Franklin New and Mondrian Emerging 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 Mondrian Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin New York and Mondrian Emerging Markets, you can compare the effects of market volatilities on Franklin New and Mondrian Emerging 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 Mondrian Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin New and Mondrian Emerging.
Diversification Opportunities for Franklin New and Mondrian Emerging
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Mondrian is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Franklin New York and Mondrian Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mondrian Emerging Markets 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 York are associated (or correlated) with Mondrian Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mondrian Emerging Markets has no effect on the direction of Franklin New i.e., Franklin New and Mondrian Emerging go up and down completely randomly.
Pair Corralation between Franklin New and Mondrian Emerging
Assuming the 90 days horizon Franklin New York is expected to generate 0.26 times more return on investment than Mondrian Emerging. However, Franklin New York is 3.85 times less risky than Mondrian Emerging. It trades about 0.12 of its potential returns per unit of risk. Mondrian Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 980.00 in Franklin New York on September 5, 2024 and sell it today you would earn a total of 35.00 from holding Franklin New York or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin New York vs. Mondrian Emerging Markets
Performance |
| Timeline |
| Franklin New York |
| Mondrian Emerging Markets |
Franklin New and Mondrian Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin New and Mondrian Emerging
The main advantage of trading using opposite Franklin New and Mondrian Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin New position performs unexpectedly, Mondrian Emerging 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 Mondrian Emerging will offset losses from the drop in Mondrian Emerging'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 |
| Mondrian Emerging vs. Arrow Managed Futures | Mondrian Emerging vs. Scharf Global Opportunity | Mondrian Emerging vs. Iaadx | Mondrian Emerging vs. Bbh Intermediate Municipal |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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