Correlation Between Versatile Bond and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Versatile Bond 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 Versatile Bond and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Versatile Bond Portfolio and Franklin Mutual European, you can compare the effects of market volatilities on Versatile Bond 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 Versatile Bond with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Versatile Bond and Franklin Mutual.
Diversification Opportunities for Versatile Bond and Franklin Mutual
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Versatile and Franklin is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Versatile Bond Portfolio 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 Versatile Bond 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 Versatile Bond Portfolio 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 Versatile Bond i.e., Versatile Bond and Franklin Mutual go up and down completely randomly.
Pair Corralation between Versatile Bond and Franklin Mutual
Assuming the 90 days horizon Versatile Bond Portfolio is expected to generate 0.13 times more return on investment than Franklin Mutual. However, Versatile Bond Portfolio is 7.54 times less risky than Franklin Mutual. It trades about -0.05 of its potential returns per unit of risk. Franklin Mutual European is currently generating about -0.18 per unit of risk. If you would invest 6,636 in Versatile Bond Portfolio on August 29, 2024 and sell it today you would lose (9.00) from holding Versatile Bond Portfolio or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Versatile Bond Portfolio vs. Franklin Mutual European
Performance |
| Timeline |
| Versatile Bond Portfolio |
| Franklin Mutual European |
Versatile Bond and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Versatile Bond and Franklin Mutual
The main advantage of trading using opposite Versatile Bond and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Versatile Bond 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.| Versatile Bond vs. Permanent Portfolio Class | Versatile Bond vs. HUMANA INC | Versatile Bond vs. Aquagold International | Versatile Bond vs. Barloworld Ltd ADR |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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