Correlation Between Franklin Mutual and Short Oil
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Short Oil 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 Short Oil 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 Short Oil Gas, you can compare the effects of market volatilities on Franklin Mutual and Short Oil 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 Short Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Short Oil.
Diversification Opportunities for Franklin Mutual and Short Oil
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Short is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Short Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Oil Gas 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 Short Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Oil Gas has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Short Oil go up and down completely randomly.
Pair Corralation between Franklin Mutual and Short Oil
Assuming the 90 days horizon Franklin Mutual Global is expected to generate 0.53 times more return on investment than Short Oil. However, Franklin Mutual Global is 1.87 times less risky than Short Oil. It trades about 0.06 of its potential returns per unit of risk. Short Oil Gas is currently generating about -0.04 per unit of risk. If you would invest 3,279 in Franklin Mutual Global on September 3, 2024 and sell it today you would earn a total of 44.00 from holding Franklin Mutual Global or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Global vs. Short Oil Gas
Performance |
| Timeline |
| Franklin Mutual Global |
| Short Oil Gas |
Franklin Mutual and Short Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Short Oil
The main advantage of trading using opposite Franklin Mutual and Short Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Short Oil 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 Short Oil will offset losses from the drop in Short Oil's long position.| Franklin Mutual vs. Dodge Global Stock | Franklin Mutual vs. T Rowe Price | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. T Rowe Price |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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