Correlation Between Franklin Growth and International Equity
Can any of the company-specific risk be diversified away by investing in both Franklin Growth and International Equity 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 Growth and International Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Growth Opportunities and International Equity Index, you can compare the effects of market volatilities on Franklin Growth and International Equity 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 Growth with a short position of International Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and International Equity.
Diversification Opportunities for Franklin Growth and International Equity
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and International is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Opportunities and International Equity Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Equity and Franklin Growth 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 Growth Opportunities are associated (or correlated) with International Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Equity has no effect on the direction of Franklin Growth i.e., Franklin Growth and International Equity go up and down completely randomly.
Pair Corralation between Franklin Growth and International Equity
Assuming the 90 days horizon Franklin Growth Opportunities is expected to under-perform the International Equity. In addition to that, Franklin Growth is 1.38 times more volatile than International Equity Index. It trades about -0.01 of its total potential returns per unit of risk. International Equity Index is currently generating about 0.02 per unit of volatility. If you would invest 1,186 in International Equity Index on September 12, 2024 and sell it today you would earn a total of 2.00 from holding International Equity Index or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Growth Opportunities vs. International Equity Index
Performance |
| Timeline |
| Franklin Growth Oppo |
| International Equity |
Franklin Growth and International Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Growth and International Equity
The main advantage of trading using opposite Franklin Growth and International Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth position performs unexpectedly, International Equity 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 International Equity will offset losses from the drop in International Equity's long position.| Franklin Growth vs. American Funds The | Franklin Growth vs. American Funds The | Franklin Growth vs. Growth Fund Of | Franklin Growth vs. Growth Fund Of |
| International Equity vs. Eip Growth And | International Equity vs. Praxis Growth Index | International Equity vs. Artisan Small Cap | International Equity vs. Franklin Growth Opportunities |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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