Correlation Between Gmo Global and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Gmo Global 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 Gmo Global and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Global Equity and Franklin Mutual Global, you can compare the effects of market volatilities on Gmo Global 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 Gmo Global with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Global and Franklin Mutual.
Diversification Opportunities for Gmo Global and Franklin Mutual
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gmo and Franklin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Global Equity and Franklin Mutual Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Global and Gmo Global 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 Gmo Global Equity 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 Global has no effect on the direction of Gmo Global i.e., Gmo Global and Franklin Mutual go up and down completely randomly.
Pair Corralation between Gmo Global and Franklin Mutual
Assuming the 90 days horizon Gmo Global Equity is expected to generate 1.19 times more return on investment than Franklin Mutual. However, Gmo Global is 1.19 times more volatile than Franklin Mutual Global. It trades about 0.05 of its potential returns per unit of risk. Franklin Mutual Global is currently generating about 0.06 per unit of risk. If you would invest 2,871 in Gmo Global Equity on September 3, 2024 and sell it today you would earn a total of 152.00 from holding Gmo Global Equity or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Global Equity vs. Franklin Mutual Global
Performance |
| Timeline |
| Gmo Global Equity |
| Franklin Mutual Global |
Gmo Global and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Global and Franklin Mutual
The main advantage of trading using opposite Gmo Global and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Global 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.| Gmo Global vs. Health Biotchnology Portfolio | Gmo Global vs. Baillie Gifford Health | Gmo Global vs. Tekla Healthcare Opportunities | Gmo Global vs. Prudential Health Sciences |
| Franklin Mutual vs. T Rowe Price | Franklin Mutual vs. William Blair Large | Franklin Mutual vs. Issachar Fund Class | Franklin Mutual vs. Volumetric Fund Volumetric |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |