Correlation Between Franklin Mutual and Investec Emerging
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Investec 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 Investec 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 Investec Emerging Markets, you can compare the effects of market volatilities on Franklin Mutual and Investec 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 Investec Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Investec Emerging.
Diversification Opportunities for Franklin Mutual and Investec Emerging
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Investec is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec 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 Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Investec Emerging go up and down completely randomly.
Pair Corralation between Franklin Mutual and Investec Emerging
Assuming the 90 days horizon Franklin Mutual is expected to generate 1.21 times less return on investment than Investec Emerging. But when comparing it to its historical volatility, Franklin Mutual Global is 1.21 times less risky than Investec Emerging. It trades about 0.06 of its potential returns per unit of risk. Investec Emerging Markets is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 875.00 in Investec Emerging Markets on September 17, 2024 and sell it today you would earn a total of 230.00 from holding Investec Emerging Markets or generate 26.29% 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. Investec Emerging Markets
Performance |
| Timeline |
| Franklin Mutual Global |
| Investec Emerging Markets |
Franklin Mutual and Investec Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Investec Emerging
The main advantage of trading using opposite Franklin Mutual and Investec Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Investec 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 Investec Emerging will offset losses from the drop in Investec Emerging's long position.| Franklin Mutual vs. Mid Cap 15x Strategy | Franklin Mutual vs. Eagle Mlp Strategy | Franklin Mutual vs. Siit Emerging Markets | Franklin Mutual vs. Angel Oak Multi Strategy |
| Investec Emerging vs. Siit Global Managed | Investec Emerging vs. Ab Global Bond | Investec Emerging vs. Franklin Mutual Global | Investec Emerging vs. Ab Global Risk |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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