Correlation Between Emerging Markets and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Franklin Mutual 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 Emerging Markets and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Emerging Markets and Franklin Mutual Quest, you can compare the effects of market volatilities on Emerging Markets and Franklin Mutual 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 Emerging Markets with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Franklin Mutual.
Diversification Opportunities for Emerging Markets and Franklin Mutual
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Emerging and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Emerging Markets and Franklin Mutual Quest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Quest and Emerging Markets 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 The Emerging Markets are associated (or correlated) with Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Quest has no effect on the direction of Emerging Markets i.e., Emerging Markets and Franklin Mutual go up and down completely randomly.
Pair Corralation between Emerging Markets and Franklin Mutual
Assuming the 90 days horizon The Emerging Markets is expected to generate 1.78 times more return on investment than Franklin Mutual. However, Emerging Markets is 1.78 times more volatile than Franklin Mutual Quest. It trades about 0.03 of its potential returns per unit of risk. Franklin Mutual Quest is currently generating about -0.03 per unit of risk. If you would invest 1,930 in The Emerging Markets on September 12, 2024 and sell it today you would earn a total of 8.00 from holding The Emerging Markets or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Emerging Markets vs. Franklin Mutual Quest
Performance |
| Timeline |
| Emerging Markets |
| Franklin Mutual Quest |
Emerging Markets and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Franklin Mutual
The main advantage of trading using opposite Emerging Markets and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Franklin Mutual 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 Franklin Mutual will offset losses from the drop in Franklin Mutual's long position.| Emerging Markets vs. Ab Global Risk | Emerging Markets vs. Jhancock Global Equity | Emerging Markets vs. Kinetics Global Fund | Emerging Markets vs. Ab Global Real |
| Franklin Mutual vs. Capital Income Builder | Franklin Mutual vs. Capital Income Builder | Franklin Mutual vs. Capital Income Builder | Franklin Mutual vs. Capital Income Builder |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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