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 Fund, 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
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Emerging is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Emerging Markets Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 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 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 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 generate 0.69 times more return on investment than Emerging Markets. However, Franklin Mutual Global is 1.44 times less risky than Emerging Markets. It trades about 0.06 of its potential returns per unit of risk. Emerging Markets Fund is currently generating about 0.01 per unit of risk. If you would invest 3,074 in Franklin Mutual Global on September 3, 2024 and sell it today you would earn a total of 143.00 from holding Franklin Mutual Global or generate 4.65% 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. Emerging Markets Fund
Performance |
| Timeline |
| Franklin Mutual Global |
| Emerging Markets |
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. Invesco Global Health | Franklin Mutual vs. Baillie Gifford Health | Franklin Mutual vs. Deutsche Health And | Franklin Mutual vs. Blackrock Health Sciences |
| Emerging Markets vs. Franklin Mutual Global | Emerging Markets vs. Templeton Growth Fund | Emerging Markets vs. Franklin Real Estate | Emerging Markets 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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