Correlation Between Kinetics Small and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Kinetics Small 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 Kinetics Small and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetics Small Cap and Franklin Mutual Financial, you can compare the effects of market volatilities on Kinetics Small 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 Kinetics Small with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetics Small and Franklin Mutual.
Diversification Opportunities for Kinetics Small and Franklin Mutual
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinetics and Franklin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kinetics Small Cap and Franklin Mutual Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Financial and Kinetics Small 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 Kinetics Small Cap 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 Financial has no effect on the direction of Kinetics Small i.e., Kinetics Small and Franklin Mutual go up and down completely randomly.
Pair Corralation between Kinetics Small and Franklin Mutual
Assuming the 90 days horizon Kinetics Small Cap is expected to generate 1.2 times more return on investment than Franklin Mutual. However, Kinetics Small is 1.2 times more volatile than Franklin Mutual Financial. It trades about 0.08 of its potential returns per unit of risk. Franklin Mutual Financial is currently generating about 0.02 per unit of risk. If you would invest 13,263 in Kinetics Small Cap on August 30, 2024 and sell it today you would earn a total of 9,888 from holding Kinetics Small Cap or generate 74.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.31% |
| Values | Daily Returns |
Kinetics Small Cap vs. Franklin Mutual Financial
Performance |
| Timeline |
| Kinetics Small Cap |
| Franklin Mutual Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kinetics Small and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetics Small and Franklin Mutual
The main advantage of trading using opposite Kinetics Small and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetics Small 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.| Kinetics Small vs. Multisector Bond Sma | Kinetics Small vs. Icon Bond Fund | Kinetics Small vs. Ambrus Core Bond | Kinetics Small vs. Blrc Sgy Mnp |
| Franklin Mutual vs. Franklin Mutual European | Franklin Mutual vs. Franklin Natural Resources | Franklin Mutual vs. Franklin Real Estate | Franklin Mutual vs. Franklin Utilities 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |