Correlation Between Mfs International and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Mfs International 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 Mfs International and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs International Diversification and Franklin Mutual Global, you can compare the effects of market volatilities on Mfs International 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 Mfs International with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and Franklin Mutual.
Diversification Opportunities for Mfs International and Franklin Mutual
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mfs and Franklin is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International Diversificat 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 Mfs International 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 Mfs International Diversification 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 Mfs International i.e., Mfs International and Franklin Mutual go up and down completely randomly.
Pair Corralation between Mfs International and Franklin Mutual
Assuming the 90 days horizon Mfs International Diversification is expected to generate 0.91 times more return on investment than Franklin Mutual. However, Mfs International Diversification is 1.1 times less risky than Franklin Mutual. It trades about 0.06 of its potential returns per unit of risk. Franklin Mutual Global is currently generating about 0.04 per unit of risk. If you would invest 1,956 in Mfs International Diversification on September 4, 2024 and sell it today you would earn a total of 412.00 from holding Mfs International Diversification or generate 21.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs International Diversificat vs. Franklin Mutual Global
Performance |
| Timeline |
| Mfs International |
| Franklin Mutual Global |
Mfs International and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs International and Franklin Mutual
The main advantage of trading using opposite Mfs International and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International 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.| Mfs International vs. Ab Bond Inflation | Mfs International vs. Asg Managed Futures | Mfs International vs. Cref Inflation Linked Bond | Mfs International vs. Oklahoma College Savings |
| Franklin Mutual vs. Franklin Mutual Beacon | Franklin Mutual vs. Templeton Developing Markets | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Templeton Foreign 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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