Correlation Between Franklin Mutual and Brandes Global
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Brandes Global 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 Franklin Mutual and Brandes Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual Global and Brandes Global Equity, you can compare the effects of market volatilities on Franklin Mutual and Brandes Global 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 Franklin Mutual with a short position of Brandes Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Brandes Global.
Diversification Opportunities for Franklin Mutual and Brandes Global
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Brandes is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Brandes Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes Global Equity and Franklin Mutual 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 Franklin Mutual Global are associated (or correlated) with Brandes Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes Global Equity has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Brandes Global go up and down completely randomly.
Pair Corralation between Franklin Mutual and Brandes Global
Assuming the 90 days horizon Franklin Mutual is expected to generate 1.28 times less return on investment than Brandes Global. But when comparing it to its historical volatility, Franklin Mutual Global is 1.09 times less risky than Brandes Global. It trades about 0.05 of its potential returns per unit of risk. Brandes Global Equity is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,966 in Brandes Global Equity on September 1, 2024 and sell it today you would earn a total of 175.00 from holding Brandes Global Equity or generate 5.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Franklin Mutual Global vs. Brandes Global Equity
Performance |
| Timeline |
| Franklin Mutual Global |
| Brandes Global Equity |
Franklin Mutual and Brandes Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Brandes Global
The main advantage of trading using opposite Franklin Mutual and Brandes Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Brandes Global 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 Brandes Global will offset losses from the drop in Brandes Global's long position.| Franklin Mutual vs. Ivy Energy Fund | Franklin Mutual vs. Fidelity Advisor Energy | Franklin Mutual vs. Gamco Natural Resources | Franklin Mutual vs. Icon Natural Resources |
| Brandes Global vs. Brandes Small Cap | Brandes Global vs. Brandes Small Cap | Brandes Global vs. Brandes Small Cap | Brandes Global vs. Brandes E Plus |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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