Correlation Between Franklin Real and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Polar Capital 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 Polar Capital 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 Polar Capital Emerging, you can compare the effects of market volatilities on Franklin Real and Polar Capital 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 Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Polar Capital.
Diversification Opportunities for Franklin Real and Polar Capital
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between FRANKLIN and Polar is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Polar Capital Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Emerging 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Emerging has no effect on the direction of Franklin Real i.e., Franklin Real and Polar Capital go up and down completely randomly.
Pair Corralation between Franklin Real and Polar Capital
Assuming the 90 days horizon Franklin Real is expected to generate 1.33 times less return on investment than Polar Capital. In addition to that, Franklin Real is 1.14 times more volatile than Polar Capital Emerging. It trades about 0.02 of its total potential returns per unit of risk. Polar Capital Emerging is currently generating about 0.04 per unit of volatility. If you would invest 709.00 in Polar Capital Emerging on September 4, 2024 and sell it today you would earn a total of 115.00 from holding Polar Capital Emerging or generate 16.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Franklin Real Estate vs. Polar Capital Emerging
Performance |
| Timeline |
| Franklin Real Estate |
| Polar Capital Emerging |
Franklin Real and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Polar Capital
The main advantage of trading using opposite Franklin Real and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Polar Capital 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 Polar Capital will offset losses from the drop in Polar Capital'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 |
| Polar Capital vs. Franklin Mutual Global | Polar Capital vs. Templeton Growth Fund | Polar Capital vs. Franklin Real Estate | Polar Capital vs. HUMANA INC |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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