Correlation Between Franklin and Oakmark Global
Can any of the company-specific risk be diversified away by investing in both Franklin and Oakmark Global 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 and Oakmark Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Government Money and Oakmark Global Fund, you can compare the effects of market volatilities on Franklin and Oakmark Global 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 with a short position of Oakmark Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin and Oakmark Global.
Diversification Opportunities for Franklin and Oakmark Global
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Oakmark is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Government Money and Oakmark Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Global and Franklin 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 Government Money are associated (or correlated) with Oakmark Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Global has no effect on the direction of Franklin i.e., Franklin and Oakmark Global go up and down completely randomly.
Pair Corralation between Franklin and Oakmark Global
Assuming the 90 days horizon Franklin is expected to generate 1.68 times less return on investment than Oakmark Global. But when comparing it to its historical volatility, Franklin Government Money is 6.75 times less risky than Oakmark Global. It trades about 0.13 of its potential returns per unit of risk. Oakmark Global Fund is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,314 in Oakmark Global Fund on August 29, 2024 and sell it today you would earn a total of 99.00 from holding Oakmark Global Fund or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Government Money vs. Oakmark Global Fund
Performance |
| Timeline |
| Franklin Government Money |
| Oakmark Global |
Franklin and Oakmark Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin and Oakmark Global
The main advantage of trading using opposite Franklin and Oakmark Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin position performs unexpectedly, Oakmark Global 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 Oakmark Global will offset losses from the drop in Oakmark Global's long position.| Franklin vs. Franklin Mutual Beacon | Franklin vs. Franklin Mutual Global | Franklin vs. Franklin Mutual Global | Franklin vs. Franklin Mutual Global |
| Oakmark Global vs. Doubleline E Fixed | Oakmark Global vs. Balanced Fund Retail | Oakmark Global vs. Rbc Global Equity | Oakmark Global vs. Us Vector Equity |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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