Correlation Between Franklin Mutual and Blue Current
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Blue Current 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 Mutual and Blue Current into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual Global and Blue Current Global, you can compare the effects of market volatilities on Franklin Mutual and Blue Current 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 Mutual with a short position of Blue Current. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Blue Current.
Diversification Opportunities for Franklin Mutual and Blue Current
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Blue is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Blue Current Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Current Global and Franklin Mutual 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 Mutual Global are associated (or correlated) with Blue Current. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Current Global has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Blue Current go up and down completely randomly.
Pair Corralation between Franklin Mutual and Blue Current
Assuming the 90 days horizon Franklin Mutual Global is expected to generate 0.86 times more return on investment than Blue Current. However, Franklin Mutual Global is 1.17 times less risky than Blue Current. It trades about 0.26 of its potential returns per unit of risk. Blue Current Global is currently generating about -0.06 per unit of risk. If you would invest 3,029 in Franklin Mutual Global on December 1, 2024 and sell it today you would earn a total of 85.00 from holding Franklin Mutual Global or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Global vs. Blue Current Global
Performance |
| Timeline |
| Franklin Mutual Global |
| Blue Current Global |
Franklin Mutual and Blue Current Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Blue Current
The main advantage of trading using opposite Franklin Mutual and Blue Current positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Blue Current 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 Blue Current will offset losses from the drop in Blue Current's long position.| Franklin Mutual vs. Buffalo High Yield | Franklin Mutual vs. Buffalo High Yield | Franklin Mutual vs. Dunham High Yield | Franklin Mutual vs. Prudential High Yield |
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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 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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