Correlation Between Regional Bank and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Regional Bank and Franklin Mutual 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 Regional Bank and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regional Bank Fund and Franklin Mutual Financial, you can compare the effects of market volatilities on Regional Bank and Franklin Mutual 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 Regional Bank with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Bank and Franklin Mutual.
Diversification Opportunities for Regional Bank and Franklin Mutual
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Regional and Franklin is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Regional Bank Fund and Franklin Mutual Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Financial and Regional Bank 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 Regional Bank Fund are associated (or correlated) with Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Financial has no effect on the direction of Regional Bank i.e., Regional Bank and Franklin Mutual go up and down completely randomly.
Pair Corralation between Regional Bank and Franklin Mutual
If you would invest 2,247 in Regional Bank Fund on September 1, 2024 and sell it today you would earn a total of 936.00 from holding Regional Bank Fund or generate 41.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Regional Bank Fund vs. Franklin Mutual Financial
Performance |
| Timeline |
| Regional Bank |
| Franklin Mutual Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Regional Bank and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Bank and Franklin Mutual
The main advantage of trading using opposite Regional Bank and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Bank position performs unexpectedly, Franklin Mutual 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 Franklin Mutual will offset losses from the drop in Franklin Mutual's long position.| Regional Bank vs. Regional Bank Fund | Regional Bank vs. Multimanager Lifestyle Moderate | Regional Bank vs. Multimanager Lifestyle Balanced | Regional Bank vs. Multimanager Lifestyle Aggressive |
| Franklin Mutual vs. Franklin Mutual European | Franklin Mutual vs. Franklin Natural Resources | Franklin Mutual vs. Franklin Real Estate | Franklin Mutual vs. Franklin Utilities Fund |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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