Correlation Between Seafarer Overseas and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Seafarer Overseas 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 Seafarer Overseas and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seafarer Overseas Value and Franklin Mutual Global, you can compare the effects of market volatilities on Seafarer Overseas 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 Seafarer Overseas with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seafarer Overseas and Franklin Mutual.
Diversification Opportunities for Seafarer Overseas and Franklin Mutual
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seafarer and Franklin is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Seafarer Overseas Value 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 Seafarer Overseas 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 Seafarer Overseas Value 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 Seafarer Overseas i.e., Seafarer Overseas and Franklin Mutual go up and down completely randomly.
Pair Corralation between Seafarer Overseas and Franklin Mutual
Assuming the 90 days horizon Seafarer Overseas is expected to generate 1.39 times less return on investment than Franklin Mutual. But when comparing it to its historical volatility, Seafarer Overseas Value is 1.16 times less risky than Franklin Mutual. It trades about 0.03 of its potential returns per unit of risk. Franklin Mutual Global is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,010 in Franklin Mutual Global on September 4, 2024 and sell it today you would earn a total of 199.00 from holding Franklin Mutual Global or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seafarer Overseas Value vs. Franklin Mutual Global
Performance |
| Timeline |
| Seafarer Overseas Value |
| Franklin Mutual Global |
Seafarer Overseas and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seafarer Overseas and Franklin Mutual
The main advantage of trading using opposite Seafarer Overseas and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seafarer Overseas 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.| Seafarer Overseas vs. Seafarer Overseas Growth | Seafarer Overseas vs. Seafarer Overseas Growth | Seafarer Overseas vs. Seafarer Overseas Value | Seafarer Overseas vs. Multi Asset Growth Strategy |
| Franklin Mutual vs. Franklin Mutual Beacon | Franklin Mutual vs. Templeton Developing Markets | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Templeton Foreign Fund |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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