Correlation Between One Choice and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both One Choice and Franklin Mutual 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 One Choice and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One Choice Portfolio and Franklin Mutual Shares, you can compare the effects of market volatilities on One Choice and Franklin Mutual 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 One Choice with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Choice and Franklin Mutual.
Diversification Opportunities for One Choice and Franklin Mutual
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between One and Franklin is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding One Choice Portfolio and Franklin Mutual Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Shares and One Choice 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 One Choice Portfolio are associated (or correlated) with Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Shares has no effect on the direction of One Choice i.e., One Choice and Franklin Mutual go up and down completely randomly.
Pair Corralation between One Choice and Franklin Mutual
Assuming the 90 days horizon One Choice Portfolio is expected to generate 0.4 times more return on investment than Franklin Mutual. However, One Choice Portfolio is 2.51 times less risky than Franklin Mutual. It trades about 0.24 of its potential returns per unit of risk. Franklin Mutual Shares is currently generating about -0.16 per unit of risk. If you would invest 1,170 in One Choice Portfolio on September 13, 2024 and sell it today you would earn a total of 12.00 from holding One Choice Portfolio or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
One Choice Portfolio vs. Franklin Mutual Shares
Performance |
| Timeline |
| One Choice Portfolio |
| Franklin Mutual Shares |
One Choice and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Choice and Franklin Mutual
The main advantage of trading using opposite One Choice and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Choice position performs unexpectedly, Franklin Mutual 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 Mutual will offset losses from the drop in Franklin Mutual's long position.| One Choice vs. One Choice Portfolio | One Choice vs. One Choice Portfolio | One Choice vs. One Choice Portfolio | One Choice vs. One Choice Portfolio |
| Franklin Mutual vs. Franklin Mutual Quest | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Mutual Beacon | Franklin Mutual vs. Franklin Mutual European |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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