Correlation Between Franklin Utilities and Doubleline Emerging
Can any of the company-specific risk be diversified away by investing in both Franklin Utilities and Doubleline 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 Utilities and Doubleline Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Utilities Fund and Doubleline Emerging Markets, you can compare the effects of market volatilities on Franklin Utilities and Doubleline 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 Utilities with a short position of Doubleline Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Utilities and Doubleline Emerging.
Diversification Opportunities for Franklin Utilities and Doubleline Emerging
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Doubleline is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Utilities Fund and Doubleline Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleline Emerging and Franklin Utilities 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 Utilities Fund are associated (or correlated) with Doubleline Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubleline Emerging has no effect on the direction of Franklin Utilities i.e., Franklin Utilities and Doubleline Emerging go up and down completely randomly.
Pair Corralation between Franklin Utilities and Doubleline Emerging
Assuming the 90 days horizon Franklin Utilities Fund is expected to generate 2.05 times more return on investment than Doubleline Emerging. However, Franklin Utilities is 2.05 times more volatile than Doubleline Emerging Markets. It trades about 0.28 of its potential returns per unit of risk. Doubleline Emerging Markets is currently generating about -0.08 per unit of risk. If you would invest 2,441 in Franklin Utilities Fund on September 1, 2024 and sell it today you would earn a total of 142.00 from holding Franklin Utilities Fund or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Utilities Fund vs. Doubleline Emerging Markets
Performance |
| Timeline |
| Franklin Utilities |
| Doubleline Emerging |
Franklin Utilities and Doubleline Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Utilities and Doubleline Emerging
The main advantage of trading using opposite Franklin Utilities and Doubleline Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Utilities position performs unexpectedly, Doubleline 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 Doubleline Emerging will offset losses from the drop in Doubleline Emerging's long position.| Franklin Utilities vs. Doubleline Emerging Markets | Franklin Utilities vs. Siit Emerging Markets | Franklin Utilities vs. Goldman Sachs Emerging | Franklin Utilities vs. Ab All Market |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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