Correlation Between Franklin Small-mid and Scharf Global
Can any of the company-specific risk be diversified away by investing in both Franklin Small-mid and Scharf Global 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 Small-mid and Scharf Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Small Mid Cap and Scharf Global Opportunity, you can compare the effects of market volatilities on Franklin Small-mid and Scharf Global 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 Small-mid with a short position of Scharf Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Small-mid and Scharf Global.
Diversification Opportunities for Franklin Small-mid and Scharf Global
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Scharf is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Small Mid Cap and Scharf Global Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Global Opportunity and Franklin Small-mid 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 Small Mid Cap are associated (or correlated) with Scharf Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Global Opportunity has no effect on the direction of Franklin Small-mid i.e., Franklin Small-mid and Scharf Global go up and down completely randomly.
Pair Corralation between Franklin Small-mid and Scharf Global
Assuming the 90 days horizon Franklin Small Mid Cap is expected to generate 1.6 times more return on investment than Scharf Global. However, Franklin Small-mid is 1.6 times more volatile than Scharf Global Opportunity. It trades about 0.35 of its potential returns per unit of risk. Scharf Global Opportunity is currently generating about 0.21 per unit of risk. If you would invest 4,570 in Franklin Small Mid Cap on August 29, 2024 and sell it today you would earn a total of 398.00 from holding Franklin Small Mid Cap or generate 8.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Small Mid Cap vs. Scharf Global Opportunity
Performance |
| Timeline |
| Franklin Small Mid |
| Scharf Global Opportunity |
Franklin Small-mid and Scharf Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Small-mid and Scharf Global
The main advantage of trading using opposite Franklin Small-mid and Scharf Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Small-mid position performs unexpectedly, Scharf Global 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 Scharf Global will offset losses from the drop in Scharf Global's long position.| Franklin Small-mid vs. Federated Emerging Market | Franklin Small-mid vs. Arrow Managed Futures | Franklin Small-mid vs. Rbc Emerging Markets | Franklin Small-mid vs. T Rowe Price |
| Scharf Global vs. Blackrock Inflation Protected | Scharf Global vs. Oklahoma College Savings | Scharf Global vs. T Rowe Price | Scharf Global vs. The Hartford Inflation |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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