Correlation Between Pace International and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Pace International 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 Pace International and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace International Emerging and Franklin Mutual European, you can compare the effects of market volatilities on Pace International 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 Pace International with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace International and Franklin Mutual.
Diversification Opportunities for Pace International and Franklin Mutual
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pace and Franklin is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pace International Emerging and Franklin Mutual European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual European and Pace International 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 Pace International Emerging 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 European has no effect on the direction of Pace International i.e., Pace International and Franklin Mutual go up and down completely randomly.
Pair Corralation between Pace International and Franklin Mutual
Assuming the 90 days horizon Pace International Emerging is expected to under-perform the Franklin Mutual. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pace International Emerging is 1.07 times less risky than Franklin Mutual. The mutual fund trades about -0.24 of its potential returns per unit of risk. The Franklin Mutual European is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 2,471 in Franklin Mutual European on August 30, 2024 and sell it today you would lose (65.00) from holding Franklin Mutual European or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace International Emerging vs. Franklin Mutual European
Performance |
| Timeline |
| Pace International |
| Franklin Mutual European |
Pace International and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace International and Franklin Mutual
The main advantage of trading using opposite Pace International and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace International 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.| Pace International vs. Virtus Real Estate | Pace International vs. Versus Capital Multi Manager | Pace International vs. Fidelity Advisor Real | Pace International vs. John Hancock Variable |
| Franklin Mutual vs. Ab Impact Municipal | Franklin Mutual vs. Versatile Bond Portfolio | Franklin Mutual vs. Bbh Intermediate Municipal | Franklin Mutual vs. Barings Active Short |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |