Correlation Between Amg River and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Amg River 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 Amg River and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg River Road and Franklin Mutual Global, you can compare the effects of market volatilities on Amg River 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 Amg River with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and Franklin Mutual.
Diversification Opportunities for Amg River and Franklin Mutual
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Amg and Franklin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and Franklin Mutual Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Global and Amg River 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 Amg River Road 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 Global has no effect on the direction of Amg River i.e., Amg River and Franklin Mutual go up and down completely randomly.
Pair Corralation between Amg River and Franklin Mutual
Assuming the 90 days horizon Amg River Road is expected to generate 2.07 times more return on investment than Franklin Mutual. However, Amg River is 2.07 times more volatile than Franklin Mutual Global. It trades about 0.34 of its potential returns per unit of risk. Franklin Mutual Global is currently generating about 0.05 per unit of risk. If you would invest 1,013 in Amg River Road on August 26, 2024 and sell it today you would earn a total of 96.00 from holding Amg River Road or generate 9.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg River Road vs. Franklin Mutual Global
Performance |
| Timeline |
| Amg River Road |
| Franklin Mutual Global |
Amg River and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg River and Franklin Mutual
The main advantage of trading using opposite Amg River and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg River 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.| Amg River vs. Amg River Road | Amg River vs. Champlain Small Pany | Amg River vs. Amg River Road | Amg River vs. Marsico Global Fund |
| Franklin Mutual vs. Lord Abbett Small | Franklin Mutual vs. Fidelity Small Cap | Franklin Mutual vs. Amg River Road | Franklin Mutual vs. American Century Etf |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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