Correlation Between Franklin Real and Lazard Emerging
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Lazard 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 Real and Lazard Emerging 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 Lazard Emerging Markets, you can compare the effects of market volatilities on Franklin Real and Lazard 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 Real with a short position of Lazard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Lazard Emerging.
Diversification Opportunities for Franklin Real and Lazard Emerging
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FRANKLIN and Lazard is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Lazard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Emerging Markets 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 Lazard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Emerging Markets has no effect on the direction of Franklin Real i.e., Franklin Real and Lazard Emerging go up and down completely randomly.
Pair Corralation between Franklin Real and Lazard Emerging
Assuming the 90 days horizon Franklin Real Estate is expected to generate 1.31 times more return on investment than Lazard Emerging. However, Franklin Real is 1.31 times more volatile than Lazard Emerging Markets. It trades about 0.08 of its potential returns per unit of risk. Lazard Emerging Markets is currently generating about 0.08 per unit of risk. If you would invest 1,566 in Franklin Real Estate on September 4, 2024 and sell it today you would earn a total of 393.00 from holding Franklin Real Estate or generate 25.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Real Estate vs. Lazard Emerging Markets
Performance |
| Timeline |
| Franklin Real Estate |
| Lazard Emerging Markets |
Franklin Real and Lazard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Lazard Emerging
The main advantage of trading using opposite Franklin Real and Lazard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Lazard 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 Lazard Emerging will offset losses from the drop in Lazard Emerging'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 |
| Lazard Emerging vs. Matthews Japan Fund | Lazard Emerging vs. Hennessy Japan Fund | Lazard Emerging vs. Basic Materials Fund | Lazard Emerging vs. Basic Materials Fund |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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