Correlation Between Franklin Mutual and Bruce Fund
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Bruce Fund 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 Bruce Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual Shares and Bruce Fund Bruce, you can compare the effects of market volatilities on Franklin Mutual and Bruce Fund 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 Bruce Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Bruce Fund.
Diversification Opportunities for Franklin Mutual and Bruce Fund
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FRANKLIN and Bruce is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Shares and Bruce Fund Bruce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bruce Fund Bruce 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 Shares are associated (or correlated) with Bruce Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bruce Fund Bruce has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Bruce Fund go up and down completely randomly.
Pair Corralation between Franklin Mutual and Bruce Fund
Assuming the 90 days horizon Franklin Mutual Shares is expected to generate 1.5 times more return on investment than Bruce Fund. However, Franklin Mutual is 1.5 times more volatile than Bruce Fund Bruce. It trades about 0.31 of its potential returns per unit of risk. Bruce Fund Bruce is currently generating about 0.08 per unit of risk. If you would invest 2,768 in Franklin Mutual Shares on August 31, 2024 and sell it today you would earn a total of 162.00 from holding Franklin Mutual Shares or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Shares vs. Bruce Fund Bruce
Performance |
| Timeline |
| Franklin Mutual Shares |
| Bruce Fund Bruce |
Franklin Mutual and Bruce Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Bruce Fund
The main advantage of trading using opposite Franklin Mutual and Bruce Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Bruce Fund 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 Bruce Fund will offset losses from the drop in Bruce Fund's long position.| Franklin Mutual vs. Franklin Mutual Quest | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Mutual Beacon | Franklin Mutual vs. Franklin Mutual European |
| Bruce Fund vs. American Funds The | Bruce Fund vs. Income Fund Of | Bruce Fund vs. Income Fund Of | Bruce Fund vs. Income Fund Of |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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