Correlation Between Franklin Resources and Mars Acquisition
Can any of the company-specific risk be diversified away by investing in both Franklin Resources and Mars Acquisition 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 Resources and Mars Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Resources and Mars Acquisition Corp, you can compare the effects of market volatilities on Franklin Resources and Mars Acquisition 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 Resources with a short position of Mars Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Resources and Mars Acquisition.
Diversification Opportunities for Franklin Resources and Mars Acquisition
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Mars is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Resources and Mars Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mars Acquisition Corp and Franklin Resources 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 Resources are associated (or correlated) with Mars Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mars Acquisition Corp has no effect on the direction of Franklin Resources i.e., Franklin Resources and Mars Acquisition go up and down completely randomly.
Pair Corralation between Franklin Resources and Mars Acquisition
Considering the 90-day investment horizon Franklin Resources is expected to generate 6.86 times more return on investment than Mars Acquisition. However, Franklin Resources is 6.86 times more volatile than Mars Acquisition Corp. It trades about 0.24 of its potential returns per unit of risk. Mars Acquisition Corp is currently generating about 0.1 per unit of risk. If you would invest 2,084 in Franklin Resources on September 2, 2024 and sell it today you would earn a total of 192.00 from holding Franklin Resources or generate 9.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Resources vs. Mars Acquisition Corp
Performance |
| Timeline |
| Franklin Resources |
| Mars Acquisition Corp |
Franklin Resources and Mars Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Resources and Mars Acquisition
The main advantage of trading using opposite Franklin Resources and Mars Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Resources position performs unexpectedly, Mars Acquisition 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 Mars Acquisition will offset losses from the drop in Mars Acquisition's long position.| Franklin Resources vs. BlackRock | Franklin Resources vs. Main Street Capital | Franklin Resources vs. Blackstone Group | Franklin Resources vs. Ares Capital |
| Mars Acquisition vs. Mars Acquisition Corp | Mars Acquisition vs. Swiftmerge Acquisition Corp | Mars Acquisition vs. Consilium Acquisition I | Mars Acquisition vs. Israel Acquisitions Corp |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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