Correlation Between Franklin Mutual and Calvert Aggressive
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Calvert Aggressive 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 Calvert Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual Shares and Calvert Aggressive Allocation, you can compare the effects of market volatilities on Franklin Mutual and Calvert Aggressive 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 Calvert Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Calvert Aggressive.
Diversification Opportunities for Franklin Mutual and Calvert Aggressive
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Calvert is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Shares and Calvert Aggressive Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Aggressive 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 Shares are associated (or correlated) with Calvert Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Aggressive has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Calvert Aggressive go up and down completely randomly.
Pair Corralation between Franklin Mutual and Calvert Aggressive
Assuming the 90 days horizon Franklin Mutual Shares is expected to generate 1.04 times more return on investment than Calvert Aggressive. However, Franklin Mutual is 1.04 times more volatile than Calvert Aggressive Allocation. It trades about 0.12 of its potential returns per unit of risk. Calvert Aggressive Allocation is currently generating about 0.11 per unit of risk. If you would invest 2,282 in Franklin Mutual Shares on September 4, 2024 and sell it today you would earn a total of 633.00 from holding Franklin Mutual Shares or generate 27.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Shares vs. Calvert Aggressive Allocation
Performance |
| Timeline |
| Franklin Mutual Shares |
| Calvert Aggressive |
Franklin Mutual and Calvert Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Calvert Aggressive
The main advantage of trading using opposite Franklin Mutual and Calvert Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Calvert Aggressive 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 Calvert Aggressive will offset losses from the drop in Calvert Aggressive's long position.| Franklin Mutual vs. Invesco Energy Fund | Franklin Mutual vs. Energy Basic Materials | Franklin Mutual vs. Firsthand Alternative Energy | Franklin Mutual vs. Icon Natural Resources |
| Calvert Aggressive vs. Calvert Developed Market | Calvert Aggressive vs. Calvert Developed Market | Calvert Aggressive vs. Calvert Short Duration | Calvert Aggressive vs. Calvert International Responsible |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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