Correlation Between Franklin International and Europacific Growth
Can any of the company-specific risk be diversified away by investing in both Franklin International and Europacific Growth 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 International and Europacific Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin International Growth and Europacific Growth Fund, you can compare the effects of market volatilities on Franklin International and Europacific Growth 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 International with a short position of Europacific Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin International and Europacific Growth.
Diversification Opportunities for Franklin International and Europacific Growth
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Europacific is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Franklin International Growth and Europacific Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europacific Growth and Franklin International 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 International Growth are associated (or correlated) with Europacific Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europacific Growth has no effect on the direction of Franklin International i.e., Franklin International and Europacific Growth go up and down completely randomly.
Pair Corralation between Franklin International and Europacific Growth
Assuming the 90 days horizon Franklin International Growth is expected to under-perform the Europacific Growth. In addition to that, Franklin International is 1.5 times more volatile than Europacific Growth Fund. It trades about -0.3 of its total potential returns per unit of risk. Europacific Growth Fund is currently generating about -0.24 per unit of volatility. If you would invest 5,815 in Europacific Growth Fund on January 18, 2024 and sell it today you would lose (174.00) from holding Europacific Growth Fund or give up 2.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin International Growth vs. Europacific Growth Fund
Performance |
| Timeline |
| Franklin International |
| Europacific Growth |
Franklin International and Europacific Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin International and Europacific Growth
The main advantage of trading using opposite Franklin International and Europacific Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin International position performs unexpectedly, Europacific Growth 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 Europacific Growth will offset losses from the drop in Europacific Growth's long position.The idea behind Franklin International Growth and Europacific Growth Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Europacific Growth vs. American Mutual Fund | Europacific Growth vs. American Mutual Fund | Europacific Growth vs. American Funds Income | Europacific Growth vs. American Funds Preservation |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |