Correlation Between Franklin Mutual and Community Reinvestment
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Community Reinvestment 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 Community Reinvestment 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 Community Reinvestment Act, you can compare the effects of market volatilities on Franklin Mutual and Community Reinvestment 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 Community Reinvestment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Community Reinvestment.
Diversification Opportunities for Franklin Mutual and Community Reinvestment
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Community is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Shares and Community Reinvestment Act in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Reinvestment 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 Community Reinvestment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Reinvestment has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Community Reinvestment go up and down completely randomly.
Pair Corralation between Franklin Mutual and Community Reinvestment
Assuming the 90 days horizon Franklin Mutual Shares is expected to generate 3.12 times more return on investment than Community Reinvestment. However, Franklin Mutual is 3.12 times more volatile than Community Reinvestment Act. It trades about 0.34 of its potential returns per unit of risk. Community Reinvestment Act is currently generating about 0.11 per unit of risk. If you would invest 2,766 in Franklin Mutual Shares on September 3, 2024 and sell it today you would earn a total of 169.00 from holding Franklin Mutual Shares or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Shares vs. Community Reinvestment Act
Performance |
| Timeline |
| Franklin Mutual Shares |
| Community Reinvestment |
Franklin Mutual and Community Reinvestment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Community Reinvestment
The main advantage of trading using opposite Franklin Mutual and Community Reinvestment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Community Reinvestment 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 Community Reinvestment will offset losses from the drop in Community Reinvestment'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 |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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