Correlation Between Franklin Founding and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Franklin Founding 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 Franklin Founding and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Founding Funds and Franklin Mutual Beacon, you can compare the effects of market volatilities on Franklin Founding 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 Franklin Founding with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Founding and Franklin Mutual.
Diversification Opportunities for Franklin Founding and Franklin Mutual
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Franklin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Founding Funds 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 Franklin Founding 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 Founding Funds 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 Franklin Founding i.e., Franklin Founding and Franklin Mutual go up and down completely randomly.
Pair Corralation between Franklin Founding and Franklin Mutual
Assuming the 90 days horizon Franklin Founding Funds is expected to generate 0.78 times more return on investment than Franklin Mutual. However, Franklin Founding Funds is 1.29 times less risky than Franklin Mutual. It trades about 0.26 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 1,601 in Franklin Founding Funds on September 13, 2024 and sell it today you would earn a total of 31.00 from holding Franklin Founding Funds or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Founding Funds vs. Franklin Mutual Beacon
Performance |
| Timeline |
| Franklin Founding Funds |
| Franklin Mutual Beacon |
Franklin Founding and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Founding and Franklin Mutual
The main advantage of trading using opposite Franklin Founding and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Founding 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.| Franklin Founding vs. Artisan High Income | Franklin Founding vs. Multisector Bond Sma | Franklin Founding vs. California Bond Fund | Franklin Founding vs. Bbh Intermediate Municipal |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| CEOs Directory Screen CEOs from public companies around the world |