Correlation Between Franklin Mutual and Amg Gwk
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Amg Gwk 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 Amg Gwk 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 Amg Gwk Smallmid, you can compare the effects of market volatilities on Franklin Mutual and Amg Gwk 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 Amg Gwk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Amg Gwk.
Diversification Opportunities for Franklin Mutual and Amg Gwk
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and Amg is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Amg Gwk Smallmid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Gwk Smallmid 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 Amg Gwk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Gwk Smallmid has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Amg Gwk go up and down completely randomly.
Pair Corralation between Franklin Mutual and Amg Gwk
Assuming the 90 days horizon Franklin Mutual is expected to generate 2.29 times less return on investment than Amg Gwk. But when comparing it to its historical volatility, Franklin Mutual Global is 1.41 times less risky than Amg Gwk. It trades about 0.05 of its potential returns per unit of risk. Amg Gwk Smallmid is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,582 in Amg Gwk Smallmid on September 12, 2024 and sell it today you would earn a total of 429.00 from holding Amg Gwk Smallmid or generate 27.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Franklin Mutual Global vs. Amg Gwk Smallmid
Performance |
| Timeline |
| Franklin Mutual Global |
| Amg Gwk Smallmid |
Franklin Mutual and Amg Gwk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Amg Gwk
The main advantage of trading using opposite Franklin Mutual and Amg Gwk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Amg Gwk 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 Amg Gwk will offset losses from the drop in Amg Gwk's long position.| Franklin Mutual vs. Qs Large Cap | Franklin Mutual vs. American Mutual Fund | Franklin Mutual vs. Virtus Nfj Large Cap | Franklin Mutual vs. Avantis Large Cap |
| Amg Gwk vs. Ppm High Yield | Amg Gwk vs. Us High Relative | Amg Gwk vs. Morningstar Aggressive Growth | Amg Gwk vs. Metropolitan West High |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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