Correlation Between Franklin Mutual and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Emerging Markets 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 Emerging Markets 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 Emerging Markets Bond, you can compare the effects of market volatilities on Franklin Mutual and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Emerging Markets.
Diversification Opportunities for Franklin Mutual and Emerging Markets
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Emerging is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Emerging Markets Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Bond 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Bond has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Emerging Markets go up and down completely randomly.
Pair Corralation between Franklin Mutual and Emerging Markets
Assuming the 90 days horizon Franklin Mutual Global is expected to under-perform the Emerging Markets. In addition to that, Franklin Mutual is 6.09 times more volatile than Emerging Markets Bond. It trades about -0.11 of its total potential returns per unit of risk. Emerging Markets Bond is currently generating about 0.08 per unit of volatility. If you would invest 841.00 in Emerging Markets Bond on October 20, 2024 and sell it today you would earn a total of 4.00 from holding Emerging Markets Bond or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Global vs. Emerging Markets Bond
Performance |
| Timeline |
| Franklin Mutual Global |
| Emerging Markets Bond |
Franklin Mutual and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Emerging Markets
The main advantage of trading using opposite Franklin Mutual and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Franklin Mutual vs. Deutsche Gold Precious | Franklin Mutual vs. Europac Gold Fund | Franklin Mutual vs. Precious Metals And | Franklin Mutual vs. Goldman Sachs Short |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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