Correlation Between Mid-cap 15x and Franklin Emerging
Can any of the company-specific risk be diversified away by investing in both Mid-cap 15x 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 Mid-cap 15x and Franklin Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap 15x Strategy and Franklin Emerging Market, you can compare the effects of market volatilities on Mid-cap 15x 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 Mid-cap 15x with a short position of Franklin Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid-cap 15x and Franklin Emerging.
Diversification Opportunities for Mid-cap 15x and Franklin Emerging
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mid-cap and Franklin is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x 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 Mid-cap 15x 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 Mid Cap 15x 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 Mid-cap 15x i.e., Mid-cap 15x and Franklin Emerging go up and down completely randomly.
Pair Corralation between Mid-cap 15x and Franklin Emerging
Assuming the 90 days horizon Mid Cap 15x Strategy is expected to generate 4.98 times more return on investment than Franklin Emerging. However, Mid-cap 15x is 4.98 times more volatile than Franklin Emerging Market. It trades about 0.29 of its potential returns per unit of risk. Franklin Emerging Market is currently generating about 0.18 per unit of risk. If you would invest 13,064 in Mid Cap 15x Strategy on October 20, 2024 and sell it today you would earn a total of 824.00 from holding Mid Cap 15x Strategy or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mid Cap 15x Strategy vs. Franklin Emerging Market
Performance |
| Timeline |
| Mid Cap 15x |
| Franklin Emerging Market |
Mid-cap 15x and Franklin Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid-cap 15x and Franklin Emerging
The main advantage of trading using opposite Mid-cap 15x and Franklin Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid-cap 15x 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.| Mid-cap 15x vs. Small Cap Value | Mid-cap 15x vs. Queens Road Small | Mid-cap 15x vs. Mutual Of America | Mid-cap 15x vs. Ultrasmall Cap Profund Ultrasmall Cap |
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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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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