Correlation Between Baillie Gifford and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford 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 Baillie Gifford and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford Health and Franklin Mutual Global, you can compare the effects of market volatilities on Baillie Gifford 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 Baillie Gifford with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Franklin Mutual.
Diversification Opportunities for Baillie Gifford and Franklin Mutual
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Baillie and Franklin is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health 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 Baillie Gifford 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 Baillie Gifford Health 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 Baillie Gifford i.e., Baillie Gifford and Franklin Mutual go up and down completely randomly.
Pair Corralation between Baillie Gifford and Franklin Mutual
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Franklin Mutual. In addition to that, Baillie Gifford is 1.61 times more volatile than Franklin Mutual Global. It trades about -0.02 of its total potential returns per unit of risk. Franklin Mutual Global is currently generating about 0.04 per unit of volatility. If you would invest 2,762 in Franklin Mutual Global on September 4, 2024 and sell it today you would earn a total of 447.00 from holding Franklin Mutual Global or generate 16.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Baillie Gifford Health vs. Franklin Mutual Global
Performance |
| Timeline |
| Baillie Gifford Health |
| Franklin Mutual Global |
Baillie Gifford and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Franklin Mutual
The main advantage of trading using opposite Baillie Gifford and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford 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.| Baillie Gifford vs. T Rowe Price | Baillie Gifford vs. T Rowe Price | Baillie Gifford vs. Cs 607 Tax | Baillie Gifford vs. Franklin High Yield |
| Franklin Mutual vs. Franklin Mutual Beacon | Franklin Mutual vs. Templeton Developing Markets | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Mutual Global |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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