Correlation Between Franklin Mutual and Blackrock High
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Blackrock High 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 Blackrock High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual European and Blackrock High Yield, you can compare the effects of market volatilities on Franklin Mutual and Blackrock High 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 Blackrock High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Blackrock High.
Diversification Opportunities for Franklin Mutual and Blackrock High
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Blackrock is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual European and Blackrock High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock High Yield 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 European are associated (or correlated) with Blackrock High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock High Yield has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Blackrock High go up and down completely randomly.
Pair Corralation between Franklin Mutual and Blackrock High
Assuming the 90 days horizon Franklin Mutual European is expected to generate 5.0 times more return on investment than Blackrock High. However, Franklin Mutual is 5.0 times more volatile than Blackrock High Yield. It trades about 0.23 of its potential returns per unit of risk. Blackrock High Yield is currently generating about 0.2 per unit of risk. If you would invest 2,481 in Franklin Mutual European on September 13, 2024 and sell it today you would earn a total of 63.00 from holding Franklin Mutual European or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Mutual European vs. Blackrock High Yield
Performance |
| Timeline |
| Franklin Mutual European |
| Blackrock High Yield |
Franklin Mutual and Blackrock High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Blackrock High
The main advantage of trading using opposite Franklin Mutual and Blackrock High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Blackrock High 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 Blackrock High will offset losses from the drop in Blackrock High's long position.| Franklin Mutual vs. Franklin Mutual Beacon | Franklin Mutual vs. Templeton Developing Markets | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Mutual Global |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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