Correlation Between Alternative Asset and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Alternative Asset 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 Alternative Asset and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alternative Asset Allocation and Franklin Mutual Global, you can compare the effects of market volatilities on Alternative Asset 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 Alternative Asset with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternative Asset and Franklin Mutual.
Diversification Opportunities for Alternative Asset and Franklin Mutual
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alternative and Franklin is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Alternative Asset Allocation 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 Alternative Asset 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 Alternative Asset Allocation 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 Alternative Asset i.e., Alternative Asset and Franklin Mutual go up and down completely randomly.
Pair Corralation between Alternative Asset and Franklin Mutual
Assuming the 90 days horizon Alternative Asset is expected to generate 1.4 times less return on investment than Franklin Mutual. But when comparing it to its historical volatility, Alternative Asset Allocation is 3.35 times less risky than Franklin Mutual. It trades about 0.13 of its potential returns per unit of risk. Franklin Mutual Global is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,647 in Franklin Mutual Global on September 14, 2024 and sell it today you would earn a total of 530.00 from holding Franklin Mutual Global or generate 20.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alternative Asset Allocation vs. Franklin Mutual Global
Performance |
| Timeline |
| Alternative Asset |
| Franklin Mutual Global |
Alternative Asset and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alternative Asset and Franklin Mutual
The main advantage of trading using opposite Alternative Asset and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternative Asset 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.The idea behind Alternative Asset Allocation and Franklin Mutual Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Franklin Mutual vs. Alternative Asset Allocation | Franklin Mutual vs. T Rowe Price | Franklin Mutual vs. Enhanced Large Pany | Franklin Mutual vs. Fisher Large 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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