Correlation Between Oklahoma Municipal and Franklin Emerging

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Oklahoma Municipal 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 Oklahoma Municipal and Franklin Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oklahoma Municipal Fund and Franklin Emerging Market, you can compare the effects of market volatilities on Oklahoma Municipal 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 Oklahoma Municipal with a short position of Franklin Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oklahoma Municipal and Franklin Emerging.

Diversification Opportunities for Oklahoma Municipal and Franklin Emerging

0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Oklahoma and FRANKLIN is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Oklahoma Municipal Fund 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 Oklahoma Municipal 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 Oklahoma Municipal Fund 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 Oklahoma Municipal i.e., Oklahoma Municipal and Franklin Emerging go up and down completely randomly.

Pair Corralation between Oklahoma Municipal and Franklin Emerging

Assuming the 90 days horizon Oklahoma Municipal is expected to generate 1.89 times less return on investment than Franklin Emerging. In addition to that, Oklahoma Municipal is 1.31 times more volatile than Franklin Emerging Market. It trades about 0.13 of its total potential returns per unit of risk. Franklin Emerging Market is currently generating about 0.32 per unit of volatility. If you would invest  1,176  in Franklin Emerging Market on December 2, 2024 and sell it today you would earn a total of  15.00  from holding Franklin Emerging Market or generate 1.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Oklahoma Municipal Fund  vs.  Franklin Emerging Market

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -1012
JavaScript chart by amCharts 3.21.15OKMUX FEMDX
       Timeline  
Oklahoma Municipal 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Oklahoma Municipal Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Oklahoma Municipal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15JanFebFebMar10.310.3510.410.4510.510.5510.6
Franklin Emerging Market 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Emerging Market are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Franklin Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15JanFebFebMar11.511.5511.611.6511.711.7511.811.8511.9

Oklahoma Municipal and Franklin Emerging Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.81-0.56-0.31-0.08850.00.0830.30.550.81.05 2468
JavaScript chart by amCharts 3.21.15OKMUX FEMDX
       Returns  

Pair Trading with Oklahoma Municipal and Franklin Emerging

The main advantage of trading using opposite Oklahoma Municipal and Franklin Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oklahoma Municipal 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.
The idea behind Oklahoma Municipal Fund and Franklin Emerging Market pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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.

Other Complementary Tools

Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios