Correlation Between Iaadx and Franklin Emerging
Can any of the company-specific risk be diversified away by investing in both Iaadx and Franklin 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 Iaadx and Franklin Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iaadx and Franklin Emerging Market, you can compare the effects of market volatilities on Iaadx and Franklin 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 Iaadx with a short position of Franklin Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iaadx and Franklin Emerging.
Diversification Opportunities for Iaadx and Franklin Emerging
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Iaadx and Franklin is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Iaadx and Franklin Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Emerging Market and Iaadx 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 Iaadx are associated (or correlated) with Franklin Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Emerging Market has no effect on the direction of Iaadx i.e., Iaadx and Franklin Emerging go up and down completely randomly.
Pair Corralation between Iaadx and Franklin Emerging
Assuming the 90 days horizon Iaadx is expected to generate 1.3 times less return on investment than Franklin Emerging. In addition to that, Iaadx is 1.16 times more volatile than Franklin Emerging Market. It trades about 0.13 of its total potential returns per unit of risk. Franklin Emerging Market is currently generating about 0.2 per unit of volatility. If you would invest 1,151 in Franklin Emerging Market on December 29, 2024 and sell it today you would earn a total of 29.00 from holding Franklin Emerging Market or generate 2.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Iaadx vs. Franklin Emerging Market
Performance |
Timeline |
Iaadx |
Franklin Emerging Market |
Iaadx and Franklin Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Iaadx and Franklin Emerging
The main advantage of trading using opposite Iaadx and Franklin Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iaadx position performs unexpectedly, Franklin 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 Franklin Emerging will offset losses from the drop in Franklin Emerging's long position.Iaadx vs. Doubleline Global Bond | Iaadx vs. Ms Global Fixed | Iaadx vs. Siit Global Managed | Iaadx vs. Aqr Global Macro |
Franklin Emerging vs. Franklin Mutual Beacon | Franklin Emerging vs. Templeton Developing Markets | Franklin Emerging vs. Franklin Mutual Global | Franklin Emerging 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |