Correlation Between Ftfa Franklin and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Ftfa Franklin 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 Ftfa Franklin and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ftfa Franklin Templeton Growth and Franklin Mutual Beacon, you can compare the effects of market volatilities on Ftfa Franklin 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 Ftfa Franklin with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ftfa Franklin and Franklin Mutual.
Diversification Opportunities for Ftfa Franklin and Franklin Mutual
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ftfa and Franklin is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ftfa Franklin Templeton Growth 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 Ftfa Franklin 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 Ftfa Franklin Templeton Growth 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 Ftfa Franklin i.e., Ftfa Franklin and Franklin Mutual go up and down completely randomly.
Pair Corralation between Ftfa Franklin and Franklin Mutual
Assuming the 90 days horizon Ftfa Franklin Templeton Growth is expected to generate 0.88 times more return on investment than Franklin Mutual. However, Ftfa Franklin Templeton Growth is 1.14 times less risky than Franklin Mutual. It trades about 0.14 of its potential returns per unit of risk. Franklin Mutual Beacon is currently generating about 0.07 per unit of risk. If you would invest 1,724 in Ftfa Franklin Templeton Growth on September 4, 2024 and sell it today you would earn a total of 402.00 from holding Ftfa Franklin Templeton Growth or generate 23.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ftfa Franklin Templeton Growth vs. Franklin Mutual Beacon
Performance |
| Timeline |
| Ftfa Franklin Templeton |
| Franklin Mutual Beacon |
Ftfa Franklin and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ftfa Franklin and Franklin Mutual
The main advantage of trading using opposite Ftfa Franklin and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ftfa Franklin 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.| Ftfa Franklin vs. Franklin Mutual Beacon | Ftfa Franklin vs. Templeton Developing Markets | Ftfa Franklin vs. Franklin Mutual Global | Ftfa Franklin vs. Franklin Mutual Global |
| Franklin Mutual vs. John Hancock Funds | Franklin Mutual vs. T Rowe Price | Franklin Mutual vs. T Rowe Price | Franklin Mutual vs. T Rowe Price |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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