Correlation Between Franklin Mutual and Franklin Founding
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin Founding 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 Franklin Mutual and Franklin Founding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual Beacon and Franklin Founding Funds, you can compare the effects of market volatilities on Franklin Mutual and Franklin Founding 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 Franklin Mutual with a short position of Franklin Founding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin Founding.
Diversification Opportunities for Franklin Mutual and Franklin Founding
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Franklin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Beacon and Franklin Founding Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Founding Funds and Franklin Mutual 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 Franklin Mutual Beacon are associated (or correlated) with Franklin Founding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Founding Funds has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin Founding go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin Founding
Assuming the 90 days horizon Franklin Mutual is expected to generate 1.78 times less return on investment than Franklin Founding. In addition to that, Franklin Mutual is 1.39 times more volatile than Franklin Founding Funds. It trades about 0.05 of its total potential returns per unit of risk. Franklin Founding Funds is currently generating about 0.13 per unit of volatility. If you would invest 1,572 in Franklin Founding Funds on September 12, 2024 and sell it today you would earn a total of 53.00 from holding Franklin Founding Funds or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Franklin Mutual Beacon vs. Franklin Founding Funds
Performance |
| Timeline |
| Franklin Mutual Beacon |
| Franklin Founding Funds |
Franklin Mutual and Franklin Founding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin Founding
The main advantage of trading using opposite Franklin Mutual and Franklin Founding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin Founding 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 Founding will offset losses from the drop in Franklin Founding's long position.| Franklin Mutual vs. Champlain Mid Cap | Franklin Mutual vs. Qs Moderate Growth | Franklin Mutual vs. Mid Cap Growth | Franklin Mutual vs. Needham Aggressive Growth |
| Franklin Founding vs. Gamco Global Gold | Franklin Founding vs. Gold And Precious | Franklin Founding vs. International Investors Gold | Franklin Founding vs. Global Gold 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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