Correlation Between Franklin Mutual and Franklin Maryland
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin Maryland 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 Maryland 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 Maryland Tax Free, you can compare the effects of market volatilities on Franklin Mutual and Franklin Maryland 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 Maryland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin Maryland.
Diversification Opportunities for Franklin Mutual and Franklin Maryland
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 Maryland Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Maryland 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 Maryland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Maryland Tax has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin Maryland go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin Maryland
Assuming the 90 days horizon Franklin Mutual Beacon is expected to generate 3.13 times more return on investment than Franklin Maryland. However, Franklin Mutual is 3.13 times more volatile than Franklin Maryland Tax Free. It trades about 0.04 of its potential returns per unit of risk. Franklin Maryland Tax Free is currently generating about 0.06 per unit of risk. If you would invest 1,501 in Franklin Mutual Beacon on September 3, 2024 and sell it today you would earn a total of 250.00 from holding Franklin Mutual Beacon or generate 16.66% 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 Maryland Tax Free
Performance |
| Timeline |
| Franklin Mutual Beacon |
| Franklin Maryland Tax |
Franklin Mutual and Franklin Maryland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin Maryland
The main advantage of trading using opposite Franklin Mutual and Franklin Maryland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin Maryland 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 Maryland will offset losses from the drop in Franklin Maryland'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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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