Correlation Between Mondrian Emerging and Franklin Convertible
Can any of the company-specific risk be diversified away by investing in both Mondrian Emerging and Franklin Convertible 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 Mondrian Emerging and Franklin Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mondrian Emerging Markets and Franklin Vertible Securities, you can compare the effects of market volatilities on Mondrian Emerging and Franklin Convertible 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 Mondrian Emerging with a short position of Franklin Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mondrian Emerging and Franklin Convertible.
Diversification Opportunities for Mondrian Emerging and Franklin Convertible
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mondrian and Franklin is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mondrian Emerging Markets and Franklin Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Convertible and Mondrian Emerging 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 Mondrian Emerging Markets are associated (or correlated) with Franklin Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Convertible has no effect on the direction of Mondrian Emerging i.e., Mondrian Emerging and Franklin Convertible go up and down completely randomly.
Pair Corralation between Mondrian Emerging and Franklin Convertible
Assuming the 90 days horizon Mondrian Emerging Markets is expected to under-perform the Franklin Convertible. In addition to that, Mondrian Emerging is 1.96 times more volatile than Franklin Vertible Securities. It trades about -0.01 of its total potential returns per unit of risk. Franklin Vertible Securities is currently generating about 0.41 per unit of volatility. If you would invest 2,200 in Franklin Vertible Securities on September 3, 2024 and sell it today you would earn a total of 288.00 from holding Franklin Vertible Securities or generate 13.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mondrian Emerging Markets vs. Franklin Vertible Securities
Performance |
| Timeline |
| Mondrian Emerging Markets |
| Franklin Convertible |
Mondrian Emerging and Franklin Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mondrian Emerging and Franklin Convertible
The main advantage of trading using opposite Mondrian Emerging and Franklin Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mondrian Emerging position performs unexpectedly, Franklin Convertible 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 Convertible will offset losses from the drop in Franklin Convertible's long position.| Mondrian Emerging vs. Franklin Mutual Global | Mondrian Emerging vs. Templeton Growth Fund | Mondrian Emerging vs. Franklin Real Estate | Mondrian Emerging vs. HUMANA INC |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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