Correlation Between Strategic Asset and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Strategic Asset 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 Strategic Asset and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Asset Management and Franklin Mutual Global, you can compare the effects of market volatilities on Strategic Asset 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 Strategic Asset with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Asset and Franklin Mutual.
Diversification Opportunities for Strategic Asset and Franklin Mutual
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Strategic and Franklin is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Asset Management and Franklin Mutual Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Global and Strategic Asset 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 Strategic Asset Management 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 Global has no effect on the direction of Strategic Asset i.e., Strategic Asset and Franklin Mutual go up and down completely randomly.
Pair Corralation between Strategic Asset and Franklin Mutual
Assuming the 90 days horizon Strategic Asset is expected to generate 2.04 times less return on investment than Franklin Mutual. But when comparing it to its historical volatility, Strategic Asset Management is 2.29 times less risky than Franklin Mutual. It trades about 0.14 of its potential returns per unit of risk. Franklin Mutual Global is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,144 in Franklin Mutual Global on September 13, 2024 and sell it today you would earn a total of 30.00 from holding Franklin Mutual Global or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 52.38% |
| Values | Daily Returns |
Strategic Asset Management vs. Franklin Mutual Global
Performance |
| Timeline |
| Strategic Asset Mana |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Franklin Mutual Global |
Strategic Asset and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Asset and Franklin Mutual
The main advantage of trading using opposite Strategic Asset and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Asset 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.| Strategic Asset vs. Strategic Asset Management | Strategic Asset vs. Strategic Asset Management | Strategic Asset vs. Strategic Asset Management | Strategic Asset vs. Strategic Asset Management |
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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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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