Correlation Between Franklin Mutual and The Gabelli
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and The Gabelli 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 The Gabelli 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 The Gabelli Focus, you can compare the effects of market volatilities on Franklin Mutual and The Gabelli 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 The Gabelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and The Gabelli.
Diversification Opportunities for Franklin Mutual and The Gabelli
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and The is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Shares and The Gabelli Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Focus 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 The Gabelli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Focus has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and The Gabelli go up and down completely randomly.
Pair Corralation between Franklin Mutual and The Gabelli
Assuming the 90 days horizon Franklin Mutual Shares is expected to under-perform the The Gabelli. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Mutual Shares is 1.35 times less risky than The Gabelli. The mutual fund trades about -0.08 of its potential returns per unit of risk. The The Gabelli Focus is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,825 in The Gabelli Focus on November 27, 2024 and sell it today you would lose (12.00) from holding The Gabelli Focus or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Shares vs. The Gabelli Focus
Performance |
| Timeline |
| Franklin Mutual Shares |
| Gabelli Focus |
Franklin Mutual and The Gabelli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and The Gabelli
The main advantage of trading using opposite Franklin Mutual and The Gabelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, The Gabelli 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 The Gabelli will offset losses from the drop in The Gabelli's long position.| Franklin Mutual vs. Multisector Bond Sma | Franklin Mutual vs. Rbc Impact Bond | Franklin Mutual vs. Rbc Impact Bond | Franklin Mutual vs. Franklin Government Money |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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