Correlation Between Franklin Mutual and Franklin Ohio
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin Ohio 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 Ohio 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 Ohio Tax Free, you can compare the effects of market volatilities on Franklin Mutual and Franklin Ohio 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 Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin Ohio.
Diversification Opportunities for Franklin Mutual and Franklin Ohio
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Franklin is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Beacon and Franklin Ohio Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Ohio Tax 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 Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Ohio Tax has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin Ohio go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin Ohio
Assuming the 90 days horizon Franklin Mutual Beacon is expected to generate 3.59 times more return on investment than Franklin Ohio. However, Franklin Mutual is 3.59 times more volatile than Franklin Ohio Tax Free. It trades about 0.08 of its potential returns per unit of risk. Franklin Ohio Tax Free is currently generating about 0.1 per unit of risk. If you would invest 1,532 in Franklin Mutual Beacon on September 3, 2024 and sell it today you would earn a total of 211.00 from holding Franklin Mutual Beacon or generate 13.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Beacon vs. Franklin Ohio Tax Free
Performance |
| Timeline |
| Franklin Mutual Beacon |
| Franklin Ohio Tax |
Franklin Mutual and Franklin Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin Ohio
The main advantage of trading using opposite Franklin Mutual and Franklin Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin Ohio 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 Ohio will offset losses from the drop in Franklin Ohio's long position.| Franklin Mutual vs. Inverse Government Long | Franklin Mutual vs. Aig Government Money | Franklin Mutual vs. Dunham Porategovernment Bond | Franklin Mutual vs. Us Government Securities |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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