Correlation Between Franklin Mutual and Franklin Adjustable
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin Adjustable 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 Adjustable 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 Adjustable Government, you can compare the effects of market volatilities on Franklin Mutual and Franklin Adjustable 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 Adjustable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin Adjustable.
Diversification Opportunities for Franklin Mutual and Franklin Adjustable
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and FRANKLIN is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Beacon and Franklin Adjustable Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Adjustable 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 Adjustable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Adjustable has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin Adjustable go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin Adjustable
Assuming the 90 days horizon Franklin Mutual Beacon is expected to generate 7.59 times more return on investment than Franklin Adjustable. However, Franklin Mutual is 7.59 times more volatile than Franklin Adjustable Government. It trades about 0.36 of its potential returns per unit of risk. Franklin Adjustable Government is currently generating about -0.08 per unit of risk. If you would invest 1,675 in Franklin Mutual Beacon on September 1, 2024 and sell it today you would earn a total of 76.00 from holding Franklin Mutual Beacon or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Beacon vs. Franklin Adjustable Government
Performance |
| Timeline |
| Franklin Mutual Beacon |
| Franklin Adjustable |
Franklin Mutual and Franklin Adjustable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin Adjustable
The main advantage of trading using opposite Franklin Mutual and Franklin Adjustable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin Adjustable 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 Adjustable will offset losses from the drop in Franklin Adjustable's long position.| Franklin Mutual vs. Aqr Risk Balanced Modities | Franklin Mutual vs. Strategic Allocation Aggressive | Franklin Mutual vs. Western Asset High | Franklin Mutual vs. Needham Aggressive Growth |
| Franklin Adjustable vs. Virtus Seix Government | Franklin Adjustable vs. Dws Government Money | Franklin Adjustable vs. Dunham Porategovernment Bond | Franklin Adjustable vs. Ab Government Exchange |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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