Correlation Between Champlain Mid and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Champlain Mid 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 Champlain Mid and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Mid Cap and Franklin Mutual Beacon, you can compare the effects of market volatilities on Champlain Mid 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 Champlain Mid with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Mid and Franklin Mutual.
Diversification Opportunities for Champlain Mid and Franklin Mutual
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Champlain and Franklin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Mid Cap and Franklin Mutual Beacon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Beacon and Champlain Mid 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 Champlain Mid Cap 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 Beacon has no effect on the direction of Champlain Mid i.e., Champlain Mid and Franklin Mutual go up and down completely randomly.
Pair Corralation between Champlain Mid and Franklin Mutual
Assuming the 90 days horizon Champlain Mid Cap is expected to generate 2.23 times more return on investment than Franklin Mutual. However, Champlain Mid is 2.23 times more volatile than Franklin Mutual Beacon. It trades about 0.14 of its potential returns per unit of risk. Franklin Mutual Beacon is currently generating about 0.0 per unit of risk. If you would invest 2,546 in Champlain Mid Cap on September 13, 2024 and sell it today you would earn a total of 70.00 from holding Champlain Mid Cap or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Mid Cap vs. Franklin Mutual Beacon
Performance |
| Timeline |
| Champlain Mid Cap |
| Franklin Mutual Beacon |
Champlain Mid and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Mid and Franklin Mutual
The main advantage of trading using opposite Champlain Mid and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Mid 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.| Champlain Mid vs. Champlain Small Pany | Champlain Mid vs. T Rowe Price | Champlain Mid vs. American Mutual Fund | Champlain Mid vs. Loomis Sayles Growth |
| Franklin Mutual vs. Alliancebernstein Global High | Franklin Mutual vs. Ab Global Risk | Franklin Mutual vs. Kinetics Global Fund | Franklin Mutual vs. Ab Global Real |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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