Correlation Between Franklin Mutual and Pro Blend
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Pro Blend 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 Pro Blend 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 Pro Blend Maximum Term, you can compare the effects of market volatilities on Franklin Mutual and Pro Blend 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 Pro Blend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Pro Blend.
Diversification Opportunities for Franklin Mutual and Pro Blend
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Pro is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Shares and Pro Blend Maximum Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro Blend Maximum 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 Pro Blend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro Blend Maximum has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Pro Blend go up and down completely randomly.
Pair Corralation between Franklin Mutual and Pro Blend
Assuming the 90 days horizon Franklin Mutual Shares is expected to generate 1.28 times more return on investment than Pro Blend. However, Franklin Mutual is 1.28 times more volatile than Pro Blend Maximum Term. It trades about 0.12 of its potential returns per unit of risk. Pro Blend Maximum Term is currently generating about 0.13 per unit of risk. If you would invest 2,540 in Franklin Mutual Shares on September 13, 2024 and sell it today you would earn a total of 286.00 from holding Franklin Mutual Shares or generate 11.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Shares vs. Pro Blend Maximum Term
Performance |
| Timeline |
| Franklin Mutual Shares |
| Pro Blend Maximum |
Franklin Mutual and Pro Blend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Pro Blend
The main advantage of trading using opposite Franklin Mutual and Pro Blend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Pro Blend 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 Pro Blend will offset losses from the drop in Pro Blend's long position.| Franklin Mutual vs. Federated Hermes Conservative | Franklin Mutual vs. Global Diversified Income | Franklin Mutual vs. Western Asset Diversified | Franklin Mutual vs. Fidelity Advisor Diversified |
| Pro Blend vs. Western Asset Inflation | Pro Blend vs. Arrow Managed Futures | Pro Blend vs. Aqr Managed Futures | Pro Blend vs. American Funds Inflation |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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