Correlation Between Franklin Mutual and Causeway Global
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Causeway 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 Causeway 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 Causeway Global Value, you can compare the effects of market volatilities on Franklin Mutual and Causeway 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 Causeway Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Causeway Global.
Diversification Opportunities for Franklin Mutual and Causeway Global
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Causeway is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Causeway Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Causeway Global Value 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 Causeway Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Causeway Global Value has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Causeway Global go up and down completely randomly.
Pair Corralation between Franklin Mutual and Causeway Global
Assuming the 90 days horizon Franklin Mutual is expected to generate 1.11 times less return on investment than Causeway Global. But when comparing it to its historical volatility, Franklin Mutual Global is 1.23 times less risky than Causeway Global. It trades about 0.05 of its potential returns per unit of risk. Causeway Global Value is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,497 in Causeway Global Value on September 1, 2024 and sell it today you would earn a total of 74.00 from holding Causeway Global Value or generate 4.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Franklin Mutual Global vs. Causeway Global Value
Performance |
| Timeline |
| Franklin Mutual Global |
| Causeway Global Value |
Franklin Mutual and Causeway Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Causeway Global
The main advantage of trading using opposite Franklin Mutual and Causeway Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Causeway 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 Causeway Global will offset losses from the drop in Causeway 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 |
| Causeway Global vs. Causeway International Small | Causeway Global vs. Causeway Emerging Markets | Causeway Global vs. Causeway Emerging Markets | Causeway Global vs. Causeway International Opportunities |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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