Correlation Between Scharf Fund and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Scharf Fund 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 Scharf Fund and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Fund Retail and Franklin Mutual Beacon, you can compare the effects of market volatilities on Scharf Fund 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 Scharf Fund with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Franklin Mutual.
Diversification Opportunities for Scharf Fund and Franklin Mutual
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Scharf and Franklin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Franklin Mutual Beacon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Beacon and Scharf Fund 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 Scharf Fund Retail 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 Beacon has no effect on the direction of Scharf Fund i.e., Scharf Fund and Franklin Mutual go up and down completely randomly.
Pair Corralation between Scharf Fund and Franklin Mutual
Assuming the 90 days horizon Scharf Fund Retail is expected to generate 1.01 times more return on investment than Franklin Mutual. However, Scharf Fund is 1.01 times more volatile than Franklin Mutual Beacon. It trades about 0.14 of its potential returns per unit of risk. Franklin Mutual Beacon is currently generating about 0.07 per unit of risk. If you would invest 5,480 in Scharf Fund Retail on August 31, 2024 and sell it today you would earn a total of 277.00 from holding Scharf Fund Retail or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Fund Retail vs. Franklin Mutual Beacon
Performance |
| Timeline |
| Scharf Fund Retail |
| Franklin Mutual Beacon |
Scharf Fund and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and Franklin Mutual
The main advantage of trading using opposite Scharf Fund and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund 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.| Scharf Fund vs. Aquagold International | Scharf Fund vs. Morningstar Unconstrained Allocation | Scharf Fund vs. Thrivent High Yield | Scharf Fund vs. Via Renewables |
| Franklin Mutual vs. T Rowe Price | Franklin Mutual vs. Qs Large Cap | Franklin Mutual vs. Americafirst Large Cap | Franklin Mutual vs. Fidelity Series 1000 |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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