Correlation Between Transamerica Asset and Franklin Emerging
Can any of the company-specific risk be diversified away by investing in both Transamerica Asset and Franklin 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 Transamerica Asset and Franklin Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Asset Allocation and Franklin Emerging Market, you can compare the effects of market volatilities on Transamerica Asset and Franklin 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 Transamerica Asset with a short position of Franklin Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Asset and Franklin Emerging.
Diversification Opportunities for Transamerica Asset and Franklin Emerging
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Transamerica and Franklin is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Asset Allocation and Franklin Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Emerging Market and Transamerica Asset 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 Transamerica Asset Allocation are associated (or correlated) with Franklin Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Emerging Market has no effect on the direction of Transamerica Asset i.e., Transamerica Asset and Franklin Emerging go up and down completely randomly.
Pair Corralation between Transamerica Asset and Franklin Emerging
Assuming the 90 days horizon Transamerica Asset Allocation is expected to generate 2.37 times more return on investment than Franklin Emerging. However, Transamerica Asset is 2.37 times more volatile than Franklin Emerging Market. It trades about 0.16 of its potential returns per unit of risk. Franklin Emerging Market is currently generating about 0.24 per unit of risk. If you would invest 1,534 in Transamerica Asset Allocation on September 13, 2024 and sell it today you would earn a total of 25.00 from holding Transamerica Asset Allocation or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Transamerica Asset Allocation vs. Franklin Emerging Market
Performance |
| Timeline |
| Transamerica Asset |
| Franklin Emerging Market |
Transamerica Asset and Franklin Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Asset and Franklin Emerging
The main advantage of trading using opposite Transamerica Asset and Franklin Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Asset position performs unexpectedly, Franklin 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 Franklin Emerging will offset losses from the drop in Franklin Emerging's long position.| Transamerica Asset vs. Transamerica Emerging Markets | Transamerica Asset vs. Nasdaq 100 2x Strategy | Transamerica Asset vs. Dws Emerging Markets | Transamerica Asset vs. Ep Emerging Markets |
| Franklin Emerging vs. Health Biotchnology Portfolio | Franklin Emerging vs. Deutsche Health And | Franklin Emerging vs. Baron Health Care | Franklin Emerging vs. Prudential Health Sciences |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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