Correlation Between NYSE Composite and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Franklin Mutual 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 NYSE Composite and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Franklin Mutual Shares, you can compare the effects of market volatilities on NYSE Composite and Franklin Mutual 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 NYSE Composite with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Franklin Mutual.
Diversification Opportunities for NYSE Composite and Franklin Mutual
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Franklin is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Franklin Mutual Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Shares and NYSE Composite 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 NYSE Composite are associated (or correlated) with Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Shares has no effect on the direction of NYSE Composite i.e., NYSE Composite and Franklin Mutual go up and down completely randomly.
Pair Corralation between NYSE Composite and Franklin Mutual
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.92 times more return on investment than Franklin Mutual. However, NYSE Composite is 1.08 times less risky than Franklin Mutual. It trades about 0.14 of its potential returns per unit of risk. Franklin Mutual Shares is currently generating about 0.12 per unit of risk. If you would invest 1,596,299 in NYSE Composite on August 25, 2024 and sell it today you would earn a total of 416,046 from holding NYSE Composite or generate 26.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Franklin Mutual Shares
Performance |
| Timeline |
NYSE Composite and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Franklin Mutual Shares
Pair trading matchups for Franklin Mutual
Pair Trading with NYSE Composite and Franklin Mutual
The main advantage of trading using opposite NYSE Composite and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Franklin Mutual 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 Mutual will offset losses from the drop in Franklin Mutual's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Franklin Mutual vs. Putnam Convertible Incm Gwth | Franklin Mutual vs. Absolute Convertible Arbitrage | Franklin Mutual vs. Invesco Vertible Securities | Franklin Mutual vs. Fidelity Vertible Securities |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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