Correlation Between Growth Strategy and Franklin Emerging
Can any of the company-specific risk be diversified away by investing in both Growth Strategy 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 Growth Strategy and Franklin Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Strategy Fund and Franklin Emerging Market, you can compare the effects of market volatilities on Growth Strategy 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 Growth Strategy with a short position of Franklin Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Strategy and Franklin Emerging.
Diversification Opportunities for Growth Strategy and Franklin Emerging
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GROWTH and Franklin is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Growth Strategy 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 Growth Strategy 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 Growth Strategy 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 Growth Strategy i.e., Growth Strategy and Franklin Emerging go up and down completely randomly.
Pair Corralation between Growth Strategy and Franklin Emerging
Assuming the 90 days horizon Growth Strategy Fund is expected to generate 2.47 times more return on investment than Franklin Emerging. However, Growth Strategy is 2.47 times more volatile than Franklin Emerging Market. It trades about 0.13 of its potential returns per unit of risk. Franklin Emerging Market is currently generating about 0.25 per unit of risk. If you would invest 1,109 in Growth Strategy Fund on September 2, 2024 and sell it today you would earn a total of 235.00 from holding Growth Strategy Fund or generate 21.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Strategy Fund vs. Franklin Emerging Market
Performance |
| Timeline |
| Growth Strategy |
| Franklin Emerging Market |
Growth Strategy and Franklin Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Strategy and Franklin Emerging
The main advantage of trading using opposite Growth Strategy and Franklin Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Strategy 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.| Growth Strategy vs. International Developed Markets | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate |
| Franklin Emerging vs. Delaware Limited Term Diversified | Franklin Emerging vs. The Gabelli Small | Franklin Emerging vs. Harbor Diversified International | Franklin Emerging vs. Western Asset Diversified |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |