Correlation Between Franklin Mutual and Templeton Growth
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Templeton Growth 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 Templeton Growth 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 Templeton Growth Fund, you can compare the effects of market volatilities on Franklin Mutual and Templeton Growth 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 Templeton Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Templeton Growth.
Diversification Opportunities for Franklin Mutual and Templeton Growth
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Templeton is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Beacon and Templeton Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Growth 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 Templeton Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Growth has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Templeton Growth go up and down completely randomly.
Pair Corralation between Franklin Mutual and Templeton Growth
Assuming the 90 days horizon Franklin Mutual Beacon is expected to generate 0.88 times more return on investment than Templeton Growth. However, Franklin Mutual Beacon is 1.13 times less risky than Templeton Growth. It trades about 0.16 of its potential returns per unit of risk. Templeton Growth Fund is currently generating about 0.02 per unit of risk. If you would invest 1,699 in Franklin Mutual Beacon on August 29, 2024 and sell it today you would earn a total of 37.00 from holding Franklin Mutual Beacon or generate 2.18% 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. Templeton Growth Fund
Performance |
| Timeline |
| Franklin Mutual Beacon |
| Templeton Growth |
Franklin Mutual and Templeton Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Templeton Growth
The main advantage of trading using opposite Franklin Mutual and Templeton Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Templeton Growth 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 Templeton Growth will offset losses from the drop in Templeton Growth's long position.| Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Dodge Global Stock | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Mutual Global |
| Templeton Growth vs. Guinness Atkinson Alternative | Templeton Growth vs. Goldman Sachs Mlp | Templeton Growth vs. Alpsalerian Energy Infrastructure | Templeton Growth vs. Clearbridge Energy Mlp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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