Correlation Between Huber Capital and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Huber Capital 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 Huber Capital and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huber Capital Diversified and Franklin Mutual Shares, you can compare the effects of market volatilities on Huber Capital 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 Huber Capital with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huber Capital and Franklin Mutual.
Diversification Opportunities for Huber Capital and Franklin Mutual
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huber and Franklin is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Huber Capital Diversified and Franklin Mutual Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Shares and Huber Capital 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 Huber Capital Diversified 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 Shares has no effect on the direction of Huber Capital i.e., Huber Capital and Franklin Mutual go up and down completely randomly.
Pair Corralation between Huber Capital and Franklin Mutual
Assuming the 90 days horizon Huber Capital is expected to generate 1.05 times less return on investment than Franklin Mutual. In addition to that, Huber Capital is 1.37 times more volatile than Franklin Mutual Shares. It trades about 0.24 of its total potential returns per unit of risk. Franklin Mutual Shares is currently generating about 0.35 per unit of volatility. If you would invest 2,755 in Franklin Mutual Shares on September 1, 2024 and sell it today you would earn a total of 179.00 from holding Franklin Mutual Shares or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Huber Capital Diversified vs. Franklin Mutual Shares
Performance |
| Timeline |
| Huber Capital Diversified |
| Franklin Mutual Shares |
Huber Capital and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huber Capital and Franklin Mutual
The main advantage of trading using opposite Huber Capital and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huber Capital 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.| Huber Capital vs. Aqr Long Short Equity | Huber Capital vs. Rbc Emerging Markets | Huber Capital vs. Ab All Market | Huber Capital vs. Aqr Sustainable Long Short |
| Franklin Mutual vs. The Hartford Small | Franklin Mutual vs. Ab Small Cap | Franklin Mutual vs. Baird Smallmid Cap | Franklin Mutual vs. Artisan Small Cap |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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