Correlation Between Templeton Emerging and Franklin Efolio
Can any of the company-specific risk be diversified away by investing in both Templeton Emerging and Franklin Efolio 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 Templeton Emerging and Franklin Efolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Emerging Markets and Franklin Efolio Allocation, you can compare the effects of market volatilities on Templeton Emerging and Franklin Efolio 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 Templeton Emerging with a short position of Franklin Efolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Emerging and Franklin Efolio.
Diversification Opportunities for Templeton Emerging and Franklin Efolio
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and Franklin is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Emerging Markets and Franklin Efolio Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Efolio Allo and Templeton Emerging 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 Templeton Emerging Markets are associated (or correlated) with Franklin Efolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Efolio Allo has no effect on the direction of Templeton Emerging i.e., Templeton Emerging and Franklin Efolio go up and down completely randomly.
Pair Corralation between Templeton Emerging and Franklin Efolio
Assuming the 90 days horizon Templeton Emerging Markets is expected to under-perform the Franklin Efolio. But the mutual fund apears to be less risky and, when comparing its historical volatility, Templeton Emerging Markets is 1.39 times less risky than Franklin Efolio. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Franklin Efolio Allocation is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,361 in Franklin Efolio Allocation on September 1, 2024 and sell it today you would earn a total of 121.00 from holding Franklin Efolio Allocation or generate 5.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Templeton Emerging Markets vs. Franklin Efolio Allocation
Performance |
| Timeline |
| Templeton Emerging |
| Franklin Efolio Allo |
Templeton Emerging and Franklin Efolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Emerging and Franklin Efolio
The main advantage of trading using opposite Templeton Emerging and Franklin Efolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Emerging position performs unexpectedly, Franklin Efolio 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 Efolio will offset losses from the drop in Franklin Efolio's long position.| Templeton Emerging vs. Precious Metals And | Templeton Emerging vs. International Investors Gold | Templeton Emerging vs. Short Precious Metals | Templeton Emerging vs. Great West Goldman Sachs |
| Franklin Efolio vs. Franklin Mutual Beacon | Franklin Efolio vs. Templeton Developing Markets | Franklin Efolio vs. Franklin Mutual Global | Franklin Efolio vs. Franklin Mutual Global |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |