Correlation Between Mfs International and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Mfs International and Franklin Growth 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 Growth 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 Growth Opportunities, you can compare the effects of market volatilities on Mfs International and Franklin Growth 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 Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and Franklin Growth.
Diversification Opportunities for Mfs International and Franklin Growth
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mfs and Franklin is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International Diversificat and Franklin Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth Oppo 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 Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth Oppo has no effect on the direction of Mfs International i.e., Mfs International and Franklin Growth go up and down completely randomly.
Pair Corralation between Mfs International and Franklin Growth
Assuming the 90 days horizon Mfs International is expected to generate 5.52 times less return on investment than Franklin Growth. But when comparing it to its historical volatility, Mfs International Diversification is 1.4 times less risky than Franklin Growth. It trades about 0.02 of its potential returns per unit of risk. Franklin Growth Opportunities is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,642 in Franklin Growth Opportunities on September 3, 2024 and sell it today you would earn a total of 702.00 from holding Franklin Growth Opportunities or generate 12.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs International Diversificat vs. Franklin Growth Opportunities
Performance |
| Timeline |
| Mfs International |
| Franklin Growth Oppo |
Mfs International and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs International and Franklin Growth
The main advantage of trading using opposite Mfs International and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International position performs unexpectedly, Franklin Growth 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 Growth will offset losses from the drop in Franklin Growth's long position.| Mfs International vs. Franklin Dynatech Fund | Mfs International vs. John Hancock Bond | Mfs International vs. Prudential Total Return | Mfs International vs. Mfs Growth Fund |
| Franklin Growth vs. Massmutual Select Diversified | Franklin Growth vs. Oklahoma College Savings | Franklin Growth vs. Rbc Emerging Markets | Franklin Growth vs. Kinetics Market 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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