Correlation Between Franklin Mutual and Vanguard Federal
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Vanguard Federal 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 Vanguard Federal 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 Vanguard Federal Money, you can compare the effects of market volatilities on Franklin Mutual and Vanguard Federal 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 Vanguard Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Vanguard Federal.
Diversification Opportunities for Franklin Mutual and Vanguard Federal
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Vanguard is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Shares and Vanguard Federal Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Federal Money 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 Vanguard Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Federal Money has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Vanguard Federal go up and down completely randomly.
Pair Corralation between Franklin Mutual and Vanguard Federal
Assuming the 90 days horizon Franklin Mutual Shares is expected to generate 0.72 times more return on investment than Vanguard Federal. However, Franklin Mutual Shares is 1.38 times less risky than Vanguard Federal. It trades about 0.06 of its potential returns per unit of risk. Vanguard Federal Money is currently generating about 0.02 per unit of risk. If you would invest 2,357 in Franklin Mutual Shares on August 27, 2024 and sell it today you would earn a total of 554.00 from holding Franklin Mutual Shares or generate 23.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.83% |
| Values | Daily Returns |
Franklin Mutual Shares vs. Vanguard Federal Money
Performance |
| Timeline |
| Franklin Mutual Shares |
| Vanguard Federal Money |
Franklin Mutual and Vanguard Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Vanguard Federal
The main advantage of trading using opposite Franklin Mutual and Vanguard Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Vanguard Federal 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 Vanguard Federal will offset losses from the drop in Vanguard Federal's long position.| Franklin Mutual vs. Templeton Growth Fund | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Rising Dividends | Franklin Mutual vs. Franklin Growth Fund |
| Vanguard Federal vs. Vanguard Municipal Bond | Vanguard Federal vs. Goldman Sachs Tax Advantaged | Vanguard Federal vs. Ab Small Cap | Vanguard Federal vs. Eaton Vance Global |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |