Correlation Between Commodities Strategy and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy 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 Commodities Strategy and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodities Strategy Fund and Franklin Mutual European, you can compare the effects of market volatilities on Commodities Strategy 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 Commodities Strategy with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Franklin Mutual.
Diversification Opportunities for Commodities Strategy and Franklin Mutual
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Commodities and Franklin is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund 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 Commodities Strategy 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 Commodities Strategy Fund 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 Commodities Strategy i.e., Commodities Strategy and Franklin Mutual go up and down completely randomly.
Pair Corralation between Commodities Strategy and Franklin Mutual
Assuming the 90 days horizon Commodities Strategy Fund is expected to under-perform the Franklin Mutual. In addition to that, Commodities Strategy is 1.41 times more volatile than Franklin Mutual European. It trades about 0.0 of its total potential returns per unit of risk. Franklin Mutual European is currently generating about 0.07 per unit of volatility. If you would invest 2,154 in Franklin Mutual European on September 1, 2024 and sell it today you would earn a total of 325.00 from holding Franklin Mutual European or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Commodities Strategy Fund vs. Franklin Mutual European
Performance |
| Timeline |
| Commodities Strategy |
| Franklin Mutual European |
Commodities Strategy and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Franklin Mutual
The main advantage of trading using opposite Commodities Strategy and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy 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.| Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Energy Services Fund | Commodities Strategy vs. Energy Fund Investor | Commodities Strategy vs. Real Estate Fund |
| Franklin Mutual vs. Great West Goldman Sachs | Franklin Mutual vs. Precious Metals And | Franklin Mutual vs. Invesco Gold Special | Franklin Mutual vs. Goldman Sachs Clean |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |