Correlation Between Franklin Mutual and Franklin Microcap
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin Microcap 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 Microcap 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 Microcap Value, you can compare the effects of market volatilities on Franklin Mutual and Franklin Microcap 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 Microcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin Microcap.
Diversification Opportunities for Franklin Mutual and Franklin Microcap
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Franklin is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Franklin Microcap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Microcap Value 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 Microcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Microcap Value has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin Microcap go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin Microcap
Assuming the 90 days horizon Franklin Mutual is expected to generate 3.96 times less return on investment than Franklin Microcap. But when comparing it to its historical volatility, Franklin Mutual Global is 1.95 times less risky than Franklin Microcap. It trades about 0.06 of its potential returns per unit of risk. Franklin Microcap Value is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,775 in Franklin Microcap Value on September 3, 2024 and sell it today you would earn a total of 550.00 from holding Franklin Microcap Value or generate 19.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Global vs. Franklin Microcap Value
Performance |
| Timeline |
| Franklin Mutual Global |
| Franklin Microcap Value |
Franklin Mutual and Franklin Microcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin Microcap
The main advantage of trading using opposite Franklin Mutual and Franklin Microcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin Microcap 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 Microcap will offset losses from the drop in Franklin Microcap's long position.| Franklin Mutual vs. Invesco Global Health | Franklin Mutual vs. Baillie Gifford Health | Franklin Mutual vs. Deutsche Health And | Franklin Mutual vs. Blackrock Health Sciences |
| Franklin Microcap vs. Vanguard Small Cap Value | Franklin Microcap vs. Vanguard Small Cap Value | Franklin Microcap vs. Us Small Cap | Franklin Microcap vs. Us Targeted Value |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |