Correlation Between Champlain Small and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Champlain Small 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 Small 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 Small and Franklin Mutual Quest, you can compare the effects of market volatilities on Champlain Small 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 Small with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Franklin Mutual.
Diversification Opportunities for Champlain Small and Franklin Mutual
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Champlain and Franklin is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Franklin Mutual Quest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Quest and Champlain Small 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 Small 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 Quest has no effect on the direction of Champlain Small i.e., Champlain Small and Franklin Mutual go up and down completely randomly.
Pair Corralation between Champlain Small and Franklin Mutual
Assuming the 90 days horizon Champlain Small is expected to generate 1.87 times more return on investment than Franklin Mutual. However, Champlain Small is 1.87 times more volatile than Franklin Mutual Quest. It trades about 0.05 of its potential returns per unit of risk. Franklin Mutual Quest is currently generating about 0.08 per unit of risk. If you would invest 2,036 in Champlain Small on September 2, 2024 and sell it today you would earn a total of 516.00 from holding Champlain Small or generate 25.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small vs. Franklin Mutual Quest
Performance |
| Timeline |
| Champlain Small |
| Franklin Mutual Quest |
Champlain Small and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Franklin Mutual
The main advantage of trading using opposite Champlain Small and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small 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 Small vs. The Hartford Midcap | Champlain Small vs. Mfs Emerging Markets | Champlain Small vs. Wells Fargo Special | Champlain Small vs. Washington Mutual Investors |
| Franklin Mutual vs. Multisector Bond Sma | Franklin Mutual vs. Inflation Protected Bond Fund | Franklin Mutual vs. California Bond Fund | Franklin Mutual vs. Bbh Intermediate Municipal |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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