Correlation Between Franklin Mutual and Franklin International
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin International 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 International 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 International Growth, you can compare the effects of market volatilities on Franklin Mutual and Franklin International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin International.
Diversification Opportunities for Franklin Mutual and Franklin International
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Franklin is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Beacon and Franklin International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin International has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin International go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin International
Assuming the 90 days horizon Franklin Mutual is expected to generate 1.16 times less return on investment than Franklin International. But when comparing it to its historical volatility, Franklin Mutual Beacon is 1.43 times less risky than Franklin International. It trades about 0.06 of its potential returns per unit of risk. Franklin International Growth is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,505 in Franklin International Growth on September 12, 2024 and sell it today you would earn a total of 237.00 from holding Franklin International Growth or generate 15.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Franklin Mutual Beacon vs. Franklin International Growth
Performance |
| Timeline |
| Franklin Mutual Beacon |
| Franklin International |
Franklin Mutual and Franklin International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin International
The main advantage of trading using opposite Franklin Mutual and Franklin International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin International 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 International will offset losses from the drop in Franklin International'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 International vs. Jpmorgan High Yield | Franklin International vs. Janus High Yield Fund | Franklin International vs. T Rowe Price | Franklin International vs. Neuberger Berman Income |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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