Correlation Between Franklin Rising and Clearbridge Value
Can any of the company-specific risk be diversified away by investing in both Franklin Rising and Clearbridge Value 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 Rising and Clearbridge Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Rising Dividends and Clearbridge Value Trust, you can compare the effects of market volatilities on Franklin Rising and Clearbridge Value 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 Rising with a short position of Clearbridge Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Rising and Clearbridge Value.
Diversification Opportunities for Franklin Rising and Clearbridge Value
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Clearbridge is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Rising Dividends and Clearbridge Value Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Value Trust and Franklin Rising 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 Rising Dividends are associated (or correlated) with Clearbridge Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Value Trust has no effect on the direction of Franklin Rising i.e., Franklin Rising and Clearbridge Value go up and down completely randomly.
Pair Corralation between Franklin Rising and Clearbridge Value
Assuming the 90 days horizon Franklin Rising Dividends is expected to under-perform the Clearbridge Value. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Rising Dividends is 1.2 times less risky than Clearbridge Value. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Clearbridge Value Trust is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 14,111 in Clearbridge Value Trust on September 13, 2024 and sell it today you would lose (35.00) from holding Clearbridge Value Trust or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Rising Dividends vs. Clearbridge Value Trust
Performance |
| Timeline |
| Franklin Rising Dividends |
| Clearbridge Value Trust |
Franklin Rising and Clearbridge Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Rising and Clearbridge Value
The main advantage of trading using opposite Franklin Rising and Clearbridge Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Rising position performs unexpectedly, Clearbridge Value 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 Value will offset losses from the drop in Clearbridge Value's long position.| Franklin Rising vs. Franklin Mutual Global | Franklin Rising vs. Franklin Growth Fund | Franklin Rising vs. Franklin Dynatech Fund | Franklin Rising vs. Franklin Strategic Income |
| Clearbridge Value vs. Franklin Growth Fund | Clearbridge Value vs. Franklin Total Return | Clearbridge Value vs. Franklin Rising Dividends | Clearbridge Value vs. Franklin Mutual Shares |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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