Correlation Between Franklin Balance and Clearbridge International
Can any of the company-specific risk be diversified away by investing in both Franklin Balance and Clearbridge International 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 Balance and Clearbridge International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Balance Sheet and Clearbridge International Growth, you can compare the effects of market volatilities on Franklin Balance and Clearbridge International 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 Balance with a short position of Clearbridge International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Balance and Clearbridge International.
Diversification Opportunities for Franklin Balance and Clearbridge International
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Clearbridge is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Balance Sheet and Clearbridge International Grow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge International and Franklin Balance 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 Balance Sheet are associated (or correlated) with Clearbridge International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge International has no effect on the direction of Franklin Balance i.e., Franklin Balance and Clearbridge International go up and down completely randomly.
Pair Corralation between Franklin Balance and Clearbridge International
Assuming the 90 days horizon Franklin Balance Sheet is expected to generate 1.33 times more return on investment than Clearbridge International. However, Franklin Balance is 1.33 times more volatile than Clearbridge International Growth. It trades about 0.32 of its potential returns per unit of risk. Clearbridge International Growth is currently generating about -0.07 per unit of risk. If you would invest 3,751 in Franklin Balance Sheet on August 30, 2024 and sell it today you would earn a total of 262.00 from holding Franklin Balance Sheet or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Balance Sheet vs. Clearbridge International Grow
Performance |
| Timeline |
| Franklin Balance Sheet |
| Clearbridge International |
Franklin Balance and Clearbridge International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Balance and Clearbridge International
The main advantage of trading using opposite Franklin Balance and Clearbridge International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Balance position performs unexpectedly, Clearbridge International 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 Clearbridge International will offset losses from the drop in Clearbridge International's long position.| Franklin Balance vs. Franklin Mutual Beacon | Franklin Balance vs. Templeton Developing Markets | Franklin Balance vs. Franklin Mutual Global | Franklin Balance vs. Franklin Mutual Global |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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