Correlation Between Franklin Growth and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Franklin Growth 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 Growth 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 Growth Fund and Franklin Mutual Global, you can compare the effects of market volatilities on Franklin Growth 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 Growth with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Growth and Franklin Mutual.
Diversification Opportunities for Franklin Growth and Franklin Mutual
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Franklin is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Growth Fund and Franklin Mutual Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Global and Franklin Growth 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 Growth Fund 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 Global has no effect on the direction of Franklin Growth i.e., Franklin Growth and Franklin Mutual go up and down completely randomly.
Pair Corralation between Franklin Growth and Franklin Mutual
Assuming the 90 days horizon Franklin Growth is expected to generate 1.59 times less return on investment than Franklin Mutual. In addition to that, Franklin Growth is 1.75 times more volatile than Franklin Mutual Global. It trades about 0.18 of its total potential returns per unit of risk. Franklin Mutual Global is currently generating about 0.49 per unit of volatility. If you would invest 2,774 in Franklin Mutual Global on November 2, 2024 and sell it today you would earn a total of 158.00 from holding Franklin Mutual Global or generate 5.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Growth Fund vs. Franklin Mutual Global
Performance |
| Timeline |
| Franklin Growth |
| Franklin Mutual Global |
Franklin Growth and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Growth and Franklin Mutual
The main advantage of trading using opposite Franklin Growth and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Growth 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 Growth vs. Wilmington Diversified Income | Franklin Growth vs. Tax Managed Mid Small | Franklin Growth vs. Stone Ridge Diversified | Franklin Growth vs. Lord Abbett Diversified |
| Franklin Mutual vs. Us Government Securities | Franklin Mutual vs. Federated Government Ultrashort | Franklin Mutual vs. Intermediate Government Bond | Franklin Mutual vs. Inverse Government Long |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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