Correlation Between Inverse Nasdaq and Franklin Emerging
Can any of the company-specific risk be diversified away by investing in both Inverse Nasdaq 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 Inverse Nasdaq and Franklin Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inverse Nasdaq 100 Strategy and Franklin Emerging Market, you can compare the effects of market volatilities on Inverse Nasdaq 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 Inverse Nasdaq with a short position of Franklin Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse Nasdaq and Franklin Emerging.
Diversification Opportunities for Inverse Nasdaq and Franklin Emerging
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Inverse and Franklin is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Inverse Nasdaq 100 Strategy 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 Inverse Nasdaq 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 Inverse Nasdaq 100 Strategy 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 Inverse Nasdaq i.e., Inverse Nasdaq and Franklin Emerging go up and down completely randomly.
Pair Corralation between Inverse Nasdaq and Franklin Emerging
Assuming the 90 days horizon Inverse Nasdaq 100 Strategy is expected to under-perform the Franklin Emerging. In addition to that, Inverse Nasdaq is 5.4 times more volatile than Franklin Emerging Market. It trades about -0.06 of its total potential returns per unit of risk. Franklin Emerging Market is currently generating about 0.06 per unit of volatility. If you would invest 1,142 in Franklin Emerging Market on October 18, 2024 and sell it today you would earn a total of 12.00 from holding Franklin Emerging Market or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inverse Nasdaq 100 Strategy vs. Franklin Emerging Market
Performance |
| Timeline |
| Inverse Nasdaq 100 |
| Franklin Emerging Market |
Inverse Nasdaq and Franklin Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inverse Nasdaq and Franklin Emerging
The main advantage of trading using opposite Inverse Nasdaq and Franklin Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse Nasdaq 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.| Inverse Nasdaq vs. Rbb Fund | Inverse Nasdaq vs. Semiconductor Ultrasector Profund | Inverse Nasdaq vs. Arrow Managed Futures | Inverse Nasdaq vs. Eic Value Fund |
| Franklin Emerging vs. Rbb Fund Trust | Franklin Emerging vs. Alliancebernstein Global Highome | Franklin Emerging vs. Transamerica Asset Allocation | Franklin Emerging vs. Tax Managed Large Cap |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |