Correlation Between Cref Inflation and Franklin Emerging
Can any of the company-specific risk be diversified away by investing in both Cref Inflation 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 Cref Inflation and Franklin Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Inflation Linked Bond and Franklin Emerging Market, you can compare the effects of market volatilities on Cref Inflation 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 Cref Inflation with a short position of Franklin Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Inflation and Franklin Emerging.
Diversification Opportunities for Cref Inflation and Franklin Emerging
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cref and Franklin is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cref Inflation Linked Bond 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 Cref Inflation 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 Cref Inflation Linked Bond 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 Cref Inflation i.e., Cref Inflation and Franklin Emerging go up and down completely randomly.
Pair Corralation between Cref Inflation and Franklin Emerging
Assuming the 90 days trading horizon Cref Inflation Linked Bond is expected to generate 0.18 times more return on investment than Franklin Emerging. However, Cref Inflation Linked Bond is 5.63 times less risky than Franklin Emerging. It trades about -0.25 of its potential returns per unit of risk. Franklin Emerging Market is currently generating about -0.28 per unit of risk. If you would invest 8,568 in Cref Inflation Linked Bond on October 10, 2024 and sell it today you would lose (75.00) from holding Cref Inflation Linked Bond or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cref Inflation Linked Bond vs. Franklin Emerging Market
Performance |
| Timeline |
| Cref Inflation Linked |
| Franklin Emerging Market |
Cref Inflation and Franklin Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Inflation and Franklin Emerging
The main advantage of trading using opposite Cref Inflation and Franklin Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Inflation 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.| Cref Inflation vs. Pimco Diversified Income | Cref Inflation vs. Wells Fargo Diversified | Cref Inflation vs. Guggenheim Diversified Income | Cref Inflation vs. Allianzgi Diversified Income |
| Franklin Emerging vs. John Hancock Financial | Franklin Emerging vs. Mesirow Financial Small | Franklin Emerging vs. Icon Financial Fund | Franklin Emerging vs. Prudential Financial Services |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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