Correlation Between Franklin Mutual and Ep Emerging
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Ep 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 Franklin Mutual and Ep Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual Global and Ep Emerging Markets, you can compare the effects of market volatilities on Franklin Mutual and Ep 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 Franklin Mutual with a short position of Ep Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Ep Emerging.
Diversification Opportunities for Franklin Mutual and Ep Emerging
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and EPEIX is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Ep Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ep Emerging Markets and Franklin Mutual 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 Franklin Mutual Global are associated (or correlated) with Ep Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ep Emerging Markets has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Ep Emerging go up and down completely randomly.
Pair Corralation between Franklin Mutual and Ep Emerging
Assuming the 90 days horizon Franklin Mutual is expected to generate 1.07 times less return on investment than Ep Emerging. But when comparing it to its historical volatility, Franklin Mutual Global is 1.65 times less risky than Ep Emerging. It trades about 0.04 of its potential returns per unit of risk. Ep Emerging Markets is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,012 in Ep Emerging Markets on September 3, 2024 and sell it today you would earn a total of 12.00 from holding Ep Emerging Markets or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Global vs. Ep Emerging Markets
Performance |
| Timeline |
| Franklin Mutual Global |
| Ep Emerging Markets |
Franklin Mutual and Ep Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Ep Emerging
The main advantage of trading using opposite Franklin Mutual and Ep Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Ep 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 Ep Emerging will offset losses from the drop in Ep Emerging's long position.| Franklin Mutual vs. Invesco Global Health | Franklin Mutual vs. Baillie Gifford Health | Franklin Mutual vs. Deutsche Health And | Franklin Mutual vs. Blackrock Health Sciences |
| Ep Emerging vs. Franklin Mutual Global | Ep Emerging vs. Templeton Growth Fund | Ep Emerging vs. Franklin Real Estate | Ep Emerging vs. HUMANA INC |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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