Correlation Between Franklin Emerging and Ultrashort Emerging
Can any of the company-specific risk be diversified away by investing in both Franklin Emerging and Ultrashort 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 Emerging and Ultrashort Emerging 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 Ultrashort Emerging Markets, you can compare the effects of market volatilities on Franklin Emerging and Ultrashort 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 Emerging with a short position of Ultrashort Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Emerging and Ultrashort Emerging.
Diversification Opportunities for Franklin Emerging and Ultrashort Emerging
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Franklin and Ultrashort is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Emerging Market and Ultrashort Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrashort Emerging 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 Ultrashort Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrashort Emerging has no effect on the direction of Franklin Emerging i.e., Franklin Emerging and Ultrashort Emerging go up and down completely randomly.
Pair Corralation between Franklin Emerging and Ultrashort Emerging
Assuming the 90 days horizon Franklin Emerging Market is expected to generate 0.08 times more return on investment than Ultrashort Emerging. However, Franklin Emerging Market is 12.25 times less risky than Ultrashort Emerging. It trades about 0.47 of its potential returns per unit of risk. Ultrashort Emerging Markets is currently generating about -0.06 per unit of risk. If you would invest 1,233 in Franklin Emerging Market on May 29, 2025 and sell it today you would earn a total of 20.00 from holding Franklin Emerging Market or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Emerging Market vs. Ultrashort Emerging Markets
Performance |
| Timeline |
| Franklin Emerging Market |
| Ultrashort Emerging |
Franklin Emerging and Ultrashort Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Emerging and Ultrashort Emerging
The main advantage of trading using opposite Franklin Emerging and Ultrashort Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Emerging position performs unexpectedly, Ultrashort 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 Ultrashort Emerging will offset losses from the drop in Ultrashort Emerging's long position.| Franklin Emerging vs. Prudential High Yield | Franklin Emerging vs. T Rowe Price | Franklin Emerging vs. Pace High Yield | Franklin Emerging vs. Saat Tax Managed Aggressive |
| Ultrashort Emerging vs. Lord Abbett Short | Ultrashort Emerging vs. Pioneer High Yield | Ultrashort Emerging vs. American Century High | Ultrashort Emerging vs. Payden High Income |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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