Correlation Between Franklin Real and Western Assets
Can any of the company-specific risk be diversified away by investing in both Franklin Real and Western Assets 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 Western Assets 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 Western Assets Emerging, you can compare the effects of market volatilities on Franklin Real and Western Assets 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 Western Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Real and Western Assets.
Diversification Opportunities for Franklin Real and Western Assets
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Western is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Real Estate and Western Assets Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Assets 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 Western Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Assets Emerging has no effect on the direction of Franklin Real i.e., Franklin Real and Western Assets go up and down completely randomly.
Pair Corralation between Franklin Real and Western Assets
Assuming the 90 days horizon Franklin Real is expected to generate 4.32 times less return on investment than Western Assets. In addition to that, Franklin Real is 2.68 times more volatile than Western Assets Emerging. It trades about 0.02 of its total potential returns per unit of risk. Western Assets Emerging is currently generating about 0.2 per unit of volatility. If you would invest 1,077 in Western Assets Emerging on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Western Assets Emerging or generate 1.11% 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. Western Assets Emerging
Performance |
| Timeline |
| Franklin Real Estate |
| Western Assets Emerging |
Franklin Real and Western Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Real and Western Assets
The main advantage of trading using opposite Franklin Real and Western Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Real position performs unexpectedly, Western Assets 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 Western Assets will offset losses from the drop in Western Assets' 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 |
| Western Assets vs. Ftfa Franklin Templeton Growth | Western Assets vs. Smallcap Growth Fund | Western Assets vs. T Rowe Price | Western Assets vs. Champlain Mid Cap |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |