Correlation Between Franklin Emerging and Nuveen Equity
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Nuveen Equity 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 Emerging and Nuveen Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Emerging Market and Nuveen Equity Longshort, you can compare the effects of market volatilities on Franklin Emerging and Nuveen Equity 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 Emerging with a short position of Nuveen Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Nuveen Equity.
Diversification Opportunities for Franklin Emerging and Nuveen Equity
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and NUVEEN is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Nuveen Equity Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Equity Longshort and Franklin 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 Franklin Emerging Market are associated (or correlated) with Nuveen Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Equity Longshort has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Nuveen Equity go up and down completely randomly.
Pair Corralation between Franklin Emerging and Nuveen Equity
Assuming the 90 days horizon Franklin Emerging is expected to generate 1.19 times less return on investment than Nuveen Equity. But when comparing it to its historical volatility, Franklin Emerging Market is 2.68 times less risky than Nuveen Equity. It trades about 0.47 of its potential returns per unit of risk. Nuveen Equity Longshort is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 6,106 in Nuveen Equity Longshort on June 5, 2025 and sell it today you would earn a total of 376.00 from holding Nuveen Equity Longshort or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Emerging Market vs. Nuveen Equity Longshort
Performance |
| Timeline |
| Franklin Emerging Market |
| Nuveen Equity Longshort |
Franklin Emerging and Nuveen Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Nuveen Equity
The main advantage of trading using opposite Franklin Emerging and Nuveen Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Nuveen Equity 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 Nuveen Equity will offset losses from the drop in Nuveen Equity's long position.| Franklin Emerging vs. Franklin Mutual Beacon | Franklin Emerging vs. Templeton Developing Markets | Franklin Emerging vs. Franklin Mutual Global | Franklin Emerging vs. Franklin Mutual Global |
| Nuveen Equity vs. Nuveen Equity Longshort | Nuveen Equity vs. Nuveen Equity Longshort | Nuveen Equity vs. Guggenheim Alpha Opportunity | Nuveen Equity vs. Thrivent High Yield |
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.
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