Correlation Between Franklin Real and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Harding Loevner 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 Real and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Real Estate and Harding Loevner Frontier, you can compare the effects of market volatilities on Franklin Real and Harding Loevner 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 Real with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Harding Loevner.
Diversification Opportunities for Franklin Real and Harding Loevner
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FRANKLIN and Harding is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Harding Loevner Frontier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Frontier and Franklin Real 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 Real Estate are associated (or correlated) with Harding Loevner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harding Loevner Frontier has no effect on the direction of Franklin Real i.e., Franklin Real and Harding Loevner go up and down completely randomly.
Pair Corralation between Franklin Real and Harding Loevner
Assuming the 90 days horizon Franklin Real Estate is expected to generate 2.13 times more return on investment than Harding Loevner. However, Franklin Real is 2.13 times more volatile than Harding Loevner Frontier. It trades about 0.12 of its potential returns per unit of risk. Harding Loevner Frontier is currently generating about -0.19 per unit of risk. If you would invest 1,915 in Franklin Real Estate on September 4, 2024 and sell it today you would earn a total of 44.00 from holding Franklin Real Estate or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Real Estate vs. Harding Loevner Frontier
Performance |
| Timeline |
| Franklin Real Estate |
| Harding Loevner Frontier |
Franklin Real and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Harding Loevner
The main advantage of trading using opposite Franklin Real and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Harding Loevner 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 Harding Loevner will offset losses from the drop in Harding Loevner's long position.| Franklin Real vs. Franklin Natural Resources | Franklin Real vs. Franklin Small Cap | Franklin Real vs. Templeton Developing Markets | Franklin Real vs. Franklin Balance Sheet |
| Harding Loevner vs. Harding Loevner Funds | Harding Loevner vs. Harding Loevner Emerging | Harding Loevner vs. Harding Loevner Institutional | Harding Loevner vs. Harding Loevner Global |
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 CEOs Directory module to screen CEOs from public companies around the world.
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