Correlation Between Franklin Mutual and Columbia Global
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Columbia Global 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 Mutual and Columbia Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual Beacon and Columbia Global Equity, you can compare the effects of market volatilities on Franklin Mutual and Columbia Global 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 Mutual with a short position of Columbia Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Columbia Global.
Diversification Opportunities for Franklin Mutual and Columbia Global
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Columbia is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Beacon and Columbia Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Global Equity and Franklin Mutual 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 Mutual Beacon are associated (or correlated) with Columbia Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Global Equity has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Columbia Global go up and down completely randomly.
Pair Corralation between Franklin Mutual and Columbia Global
Assuming the 90 days horizon Franklin Mutual Beacon is expected to generate 0.98 times more return on investment than Columbia Global. However, Franklin Mutual Beacon is 1.02 times less risky than Columbia Global. It trades about 0.05 of its potential returns per unit of risk. Columbia Global Equity is currently generating about 0.03 per unit of risk. If you would invest 1,444 in Franklin Mutual Beacon on November 27, 2024 and sell it today you would earn a total of 246.00 from holding Franklin Mutual Beacon or generate 17.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Beacon vs. Columbia Global Equity
Performance |
| Timeline |
| Franklin Mutual Beacon |
| Columbia Global Equity |
Franklin Mutual and Columbia Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Columbia Global
The main advantage of trading using opposite Franklin Mutual and Columbia Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Columbia Global 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 Columbia Global will offset losses from the drop in Columbia Global's long position.| Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Mutual Shares | Franklin Mutual vs. Franklin Mutual Quest | Franklin Mutual vs. Franklin Mutual European |
| Columbia Global vs. Live Oak Health | Columbia Global vs. Eventide Healthcare Life | Columbia Global vs. Baron Health Care | Columbia Global vs. John Hancock Variable |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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