Correlation Between Franklin Mutual and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Fidelity Advisor 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 Fidelity Advisor 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 Fidelity Advisor Energy, you can compare the effects of market volatilities on Franklin Mutual and Fidelity Advisor 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 Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Fidelity Advisor.
Diversification Opportunities for Franklin Mutual and Fidelity Advisor
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Fidelity is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Shares and Fidelity Advisor Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Energy 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Energy has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Franklin Mutual and Fidelity Advisor
Assuming the 90 days horizon Franklin Mutual is expected to generate 1.06 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, Franklin Mutual Shares is 1.21 times less risky than Fidelity Advisor. It trades about 0.34 of its potential returns per unit of risk. Fidelity Advisor Energy is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 4,791 in Fidelity Advisor Energy on September 3, 2024 and sell it today you would earn a total of 310.00 from holding Fidelity Advisor Energy or generate 6.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Shares vs. Fidelity Advisor Energy
Performance |
| Timeline |
| Franklin Mutual Shares |
| Fidelity Advisor Energy |
Franklin Mutual and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Fidelity Advisor
The main advantage of trading using opposite Franklin Mutual and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor'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 |
| Fidelity Advisor vs. Sprott Gold Equity | Fidelity Advisor vs. Precious Metals And | Fidelity Advisor vs. Gamco Global Gold | Fidelity Advisor vs. Vy Goldman Sachs |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |