Correlation Between Bitcoin and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Bitcoin 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 Bitcoin and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Franklin Mutual Global, you can compare the effects of market volatilities on Bitcoin 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 Bitcoin with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Franklin Mutual.
Diversification Opportunities for Bitcoin and Franklin Mutual
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bitcoin and Franklin is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin 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 Bitcoin 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 Bitcoin 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 Bitcoin i.e., Bitcoin and Franklin Mutual go up and down completely randomly.
Pair Corralation between Bitcoin and Franklin Mutual
Assuming the 90 days trading horizon Bitcoin is expected to generate 1.2 times more return on investment than Franklin Mutual. However, Bitcoin is 1.2 times more volatile than Franklin Mutual Global. It trades about 0.16 of its potential returns per unit of risk. Franklin Mutual Global is currently generating about -0.11 per unit of risk. If you would invest 9,738,110 in Bitcoin on October 19, 2024 and sell it today you would earn a total of 697,590 from holding Bitcoin or generate 7.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Bitcoin vs. Franklin Mutual Global
Performance |
| Timeline |
| Bitcoin |
| Franklin Mutual Global |
Bitcoin and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Franklin Mutual
The main advantage of trading using opposite Bitcoin and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin 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.The idea behind Bitcoin and Franklin Mutual Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Franklin Mutual vs. Prudential Government Money | Franklin Mutual vs. Voya Government Money | Franklin Mutual vs. Elfun Government Money | Franklin Mutual vs. Hewitt Money Market |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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