Correlation Between Franklin Real and Deutsche Emerging
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Deutsche 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 Deutsche 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 Deutsche Emerging Markets, you can compare the effects of market volatilities on Franklin Real and Deutsche 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 Deutsche Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Deutsche Emerging.
Diversification Opportunities for Franklin Real and Deutsche Emerging
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between FRANKLIN and Deutsche is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Deutsche Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche 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 Deutsche Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Emerging Markets has no effect on the direction of Franklin Real i.e., Franklin Real and Deutsche Emerging go up and down completely randomly.
Pair Corralation between Franklin Real and Deutsche Emerging
Assuming the 90 days horizon Franklin Real Estate is expected to generate 1.1 times more return on investment than Deutsche Emerging. However, Franklin Real is 1.1 times more volatile than Deutsche Emerging Markets. It trades about 0.12 of its potential returns per unit of risk. Deutsche Emerging Markets is currently generating about -0.14 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Real Estate vs. Deutsche Emerging Markets
Performance |
| Timeline |
| Franklin Real Estate |
| Deutsche Emerging Markets |
Franklin Real and Deutsche Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Deutsche Emerging
The main advantage of trading using opposite Franklin Real and Deutsche Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Deutsche 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 Deutsche Emerging will offset losses from the drop in Deutsche 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 |
| Deutsche Emerging vs. Baillie Gifford Health | Deutsche Emerging vs. Deutsche Health And | Deutsche Emerging vs. Blackrock Health Sciences | Deutsche Emerging vs. Live Oak Health |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |