Correlation Between Multimanager Lifestyle and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Multimanager Lifestyle 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 Multimanager Lifestyle and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multimanager Lifestyle Aggressive and Franklin Mutual Shares, you can compare the effects of market volatilities on Multimanager Lifestyle 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 Multimanager Lifestyle with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multimanager Lifestyle and Franklin Mutual.
Diversification Opportunities for Multimanager Lifestyle and Franklin Mutual
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multimanager and Franklin is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Multimanager Lifestyle Aggress 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 Multimanager Lifestyle 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 Multimanager Lifestyle Aggressive 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 Multimanager Lifestyle i.e., Multimanager Lifestyle and Franklin Mutual go up and down completely randomly.
Pair Corralation between Multimanager Lifestyle and Franklin Mutual
Assuming the 90 days horizon Multimanager Lifestyle Aggressive is expected to generate 0.98 times more return on investment than Franklin Mutual. However, Multimanager Lifestyle Aggressive is 1.02 times less risky than Franklin Mutual. It trades about 0.06 of its potential returns per unit of risk. Franklin Mutual Shares is currently generating about 0.03 per unit of risk. If you would invest 1,205 in Multimanager Lifestyle Aggressive on November 27, 2024 and sell it today you would earn a total of 272.00 from holding Multimanager Lifestyle Aggressive or generate 22.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multimanager Lifestyle Aggress vs. Franklin Mutual Shares
Performance |
| Timeline |
| Multimanager Lifestyle |
| Franklin Mutual Shares |
Multimanager Lifestyle and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multimanager Lifestyle and Franklin Mutual
The main advantage of trading using opposite Multimanager Lifestyle and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multimanager Lifestyle 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.| Multimanager Lifestyle vs. Cref Inflation Linked Bond | Multimanager Lifestyle vs. Short Duration Inflation | Multimanager Lifestyle vs. Ab Bond Inflation | Multimanager Lifestyle vs. Lord Abbett Inflation |
| Franklin Mutual vs. Franklin Income Fund | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Templeton Foreign Fund | Franklin Mutual vs. Templeton Growth Fund |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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