Correlation Between Origin Emerging and Franklin Utilities
Can any of the company-specific risk be diversified away by investing in both Origin Emerging and Franklin Utilities 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 Origin Emerging and Franklin Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Emerging Markets and Franklin Utilities Fund, you can compare the effects of market volatilities on Origin Emerging and Franklin Utilities 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 Origin Emerging with a short position of Franklin Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Emerging and Franklin Utilities.
Diversification Opportunities for Origin Emerging and Franklin Utilities
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Origin and Franklin is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Origin Emerging Markets and Franklin Utilities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Utilities and Origin 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 Origin Emerging Markets are associated (or correlated) with Franklin Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Utilities has no effect on the direction of Origin Emerging i.e., Origin Emerging and Franklin Utilities go up and down completely randomly.
Pair Corralation between Origin Emerging and Franklin Utilities
Assuming the 90 days horizon Origin Emerging is expected to generate 2.1 times less return on investment than Franklin Utilities. But when comparing it to its historical volatility, Origin Emerging Markets is 1.12 times less risky than Franklin Utilities. It trades about 0.04 of its potential returns per unit of risk. Franklin Utilities Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,006 in Franklin Utilities Fund on August 31, 2024 and sell it today you would earn a total of 592.00 from holding Franklin Utilities Fund or generate 29.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Origin Emerging Markets vs. Franklin Utilities Fund
Performance |
| Timeline |
| Origin Emerging Markets |
| Franklin Utilities |
Origin Emerging and Franklin Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Emerging and Franklin Utilities
The main advantage of trading using opposite Origin Emerging and Franklin Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Emerging position performs unexpectedly, Franklin Utilities 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 Utilities will offset losses from the drop in Franklin Utilities' long position.| Origin Emerging vs. Pear Tree Polaris | Origin Emerging vs. Artisan High Income | Origin Emerging vs. HUMANA INC | Origin Emerging vs. Aquagold International |
| Franklin Utilities vs. Valic Company I | Franklin Utilities vs. Artisan High Income | Franklin Utilities vs. Mesirow Financial High | Franklin Utilities vs. Western Asset High |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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