Correlation Between Franklin Small and Muirfield Fund
Can any of the company-specific risk be diversified away by investing in both Franklin Small and Muirfield Fund 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 Small and Muirfield Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Small Cap and Muirfield Fund Adviser, you can compare the effects of market volatilities on Franklin Small and Muirfield Fund 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 Small with a short position of Muirfield Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Small and Muirfield Fund.
Diversification Opportunities for Franklin Small and Muirfield Fund
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Muirfield is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Small Cap and Muirfield Fund Adviser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muirfield Fund Adviser and Franklin 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 Franklin Small Cap are associated (or correlated) with Muirfield Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muirfield Fund Adviser has no effect on the direction of Franklin Small i.e., Franklin Small and Muirfield Fund go up and down completely randomly.
Pair Corralation between Franklin Small and Muirfield Fund
Assuming the 90 days horizon Franklin Small Cap is expected to generate 1.25 times more return on investment than Muirfield Fund. However, Franklin Small is 1.25 times more volatile than Muirfield Fund Adviser. It trades about 0.22 of its potential returns per unit of risk. Muirfield Fund Adviser is currently generating about 0.18 per unit of risk. If you would invest 1,611 in Franklin Small Cap on November 4, 2024 and sell it today you would earn a total of 69.00 from holding Franklin Small Cap or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Small Cap vs. Muirfield Fund Adviser
Performance |
| Timeline |
| Franklin Small Cap |
| Muirfield Fund Adviser |
Franklin Small and Muirfield Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Small and Muirfield Fund
The main advantage of trading using opposite Franklin Small and Muirfield Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Small position performs unexpectedly, Muirfield Fund 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 Muirfield Fund will offset losses from the drop in Muirfield Fund's long position.| Franklin Small vs. Fidelity Advisor Technology | Franklin Small vs. Vanguard Information Technology | Franklin Small vs. Red Oak Technology | Franklin Small vs. Columbia Global Technology |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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