Correlation Between Franklin Mutual and Franklin Corefolio
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin Corefolio 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 Corefolio 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 Efolio Allocation, you can compare the effects of market volatilities on Franklin Mutual and Franklin Corefolio 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 Corefolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin Corefolio.
Diversification Opportunities for Franklin Mutual and Franklin Corefolio
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Franklin is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Beacon and Franklin Efolio Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Efolio Allo 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 Corefolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Efolio Allo has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin Corefolio go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin Corefolio
Assuming the 90 days horizon Franklin Mutual is expected to generate 1.66 times less return on investment than Franklin Corefolio. In addition to that, Franklin Mutual is 1.0 times more volatile than Franklin Efolio Allocation. It trades about 0.04 of its total potential returns per unit of risk. Franklin Efolio Allocation is currently generating about 0.07 per unit of volatility. If you would invest 1,805 in Franklin Efolio Allocation on September 3, 2024 and sell it today you would earn a total of 555.00 from holding Franklin Efolio Allocation or generate 30.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Beacon vs. Franklin Efolio Allocation
Performance |
| Timeline |
| Franklin Mutual Beacon |
| Franklin Efolio Allo |
Franklin Mutual and Franklin Corefolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin Corefolio
The main advantage of trading using opposite Franklin Mutual and Franklin Corefolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin Corefolio 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 Corefolio will offset losses from the drop in Franklin Corefolio'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 |
| Franklin Corefolio vs. Franklin Efolio Allocation | Franklin Corefolio vs. Franklin Founding Funds | Franklin Corefolio vs. Franklin Growth Allocation | Franklin Corefolio vs. Franklin Growth 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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