Correlation Between Franklin Mutual and Franklin Floating
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin Floating 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 Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual Global and Franklin Floating Rate, you can compare the effects of market volatilities on Franklin Mutual and Franklin Floating 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 Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin Floating.
Diversification Opportunities for Franklin Mutual and Franklin Floating
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Franklin is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Franklin Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Floating Rate 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 Global are associated (or correlated) with Franklin Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Floating Rate has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin Floating go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin Floating
Assuming the 90 days horizon Franklin Mutual Global is expected to generate 8.64 times more return on investment than Franklin Floating. However, Franklin Mutual is 8.64 times more volatile than Franklin Floating Rate. It trades about 0.36 of its potential returns per unit of risk. Franklin Floating Rate is currently generating about -0.18 per unit of risk. If you would invest 2,788 in Franklin Mutual Global on November 4, 2024 and sell it today you would earn a total of 125.00 from holding Franklin Mutual Global or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Global vs. Franklin Floating Rate
Performance |
| Timeline |
| Franklin Mutual Global |
| Franklin Floating Rate |
Franklin Mutual and Franklin Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin Floating
The main advantage of trading using opposite Franklin Mutual and Franklin Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin Floating 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 Floating will offset losses from the drop in Franklin Floating's long position.| Franklin Mutual vs. Franklin Mutual Beacon | Franklin Mutual vs. Templeton Developing Markets | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Mutual Global |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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