Correlation Between Franklin Mutual and Loomis Sayles

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Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Loomis Sayles 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 Loomis Sayles 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 Loomis Sayles International, you can compare the effects of market volatilities on Franklin Mutual and Loomis Sayles 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 Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Loomis Sayles.

Diversification Opportunities for Franklin Mutual and Loomis Sayles

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Franklin and Loomis is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Loomis Sayles International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Intern 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 Loomis Sayles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loomis Sayles Intern has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Loomis Sayles go up and down completely randomly.

Pair Corralation between Franklin Mutual and Loomis Sayles

Assuming the 90 days horizon Franklin Mutual is expected to generate 1.78 times less return on investment than Loomis Sayles. But when comparing it to its historical volatility, Franklin Mutual Global is 1.38 times less risky than Loomis Sayles. It trades about 0.06 of its potential returns per unit of risk. Loomis Sayles International is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  785.00  in Loomis Sayles International on September 12, 2024 and sell it today you would earn a total of  355.00  from holding Loomis Sayles International or generate 45.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.8%
ValuesDaily Returns

Franklin Mutual Global  vs.  Loomis Sayles International

 Performance 
       Timeline  
Franklin Mutual Global 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Mutual Global are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Franklin Mutual is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Loomis Sayles Intern 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Loomis Sayles International are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Loomis Sayles may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Franklin Mutual and Loomis Sayles Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Franklin Mutual and Loomis Sayles

The main advantage of trading using opposite Franklin Mutual and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Loomis Sayles 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 Loomis Sayles will offset losses from the drop in Loomis Sayles' long position.
The idea behind Franklin Mutual Global and Loomis Sayles International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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