Correlation Between Franklin Government and Mfs Emerging
Can any of the company-specific risk be diversified away by investing in both Franklin Government and Mfs 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 Government and Mfs Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Government Money and Mfs Emerging Markets, you can compare the effects of market volatilities on Franklin Government and Mfs 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 Government with a short position of Mfs Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Government and Mfs Emerging.
Diversification Opportunities for Franklin Government and Mfs Emerging
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Mfs is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Mfs Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Emerging Markets and Franklin Government 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 Government Money are associated (or correlated) with Mfs Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Emerging Markets has no effect on the direction of Franklin Government i.e., Franklin Government and Mfs Emerging go up and down completely randomly.
Pair Corralation between Franklin Government and Mfs Emerging
Assuming the 90 days horizon Franklin Government Money is expected to generate 0.28 times more return on investment than Mfs Emerging. However, Franklin Government Money is 3.58 times less risky than Mfs Emerging. It trades about 0.12 of its potential returns per unit of risk. Mfs Emerging Markets is currently generating about 0.02 per unit of risk. If you would invest 96.00 in Franklin Government Money on September 14, 2024 and sell it today you would earn a total of 4.00 from holding Franklin Government Money or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Mfs Emerging Markets
Performance |
| Timeline |
| Franklin Government Money |
| Mfs Emerging Markets |
Franklin Government and Mfs Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Government and Mfs Emerging
The main advantage of trading using opposite Franklin Government and Mfs Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Government position performs unexpectedly, Mfs 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 Mfs Emerging will offset losses from the drop in Mfs Emerging's long position.| Franklin Government vs. Cmg Ultra Short | Franklin Government vs. Virtus Multi Sector Short | Franklin Government vs. Prudential Short Duration | Franklin Government vs. Siit Ultra Short |
| Mfs Emerging vs. Elfun Government Money | Mfs Emerging vs. Franklin Government Money | Mfs Emerging vs. Money Market Obligations | Mfs Emerging vs. The Gabelli Money |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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