Correlation Between Franklin Mutual and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Legg Mason 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 Legg Mason 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 Legg Mason Bw, you can compare the effects of market volatilities on Franklin Mutual and Legg Mason 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 Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Legg Mason.
Diversification Opportunities for Franklin Mutual and Legg Mason
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Legg is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Legg Mason Bw in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Bw 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 Legg Mason. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legg Mason Bw has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Legg Mason go up and down completely randomly.
Pair Corralation between Franklin Mutual and Legg Mason
Assuming the 90 days horizon Franklin Mutual Global is expected to generate 1.75 times more return on investment than Legg Mason. However, Franklin Mutual is 1.75 times more volatile than Legg Mason Bw. It trades about 0.12 of its potential returns per unit of risk. Legg Mason Bw is currently generating about -0.03 per unit of risk. If you would invest 3,151 in Franklin Mutual Global on August 30, 2024 and sell it today you would earn a total of 50.00 from holding Franklin Mutual Global or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Global vs. Legg Mason Bw
Performance |
| Timeline |
| Franklin Mutual Global |
| Legg Mason Bw |
Franklin Mutual and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Legg Mason
The main advantage of trading using opposite Franklin Mutual and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Legg Mason 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 Legg Mason will offset losses from the drop in Legg Mason's long position.| Franklin Mutual vs. Prudential High Yield | Franklin Mutual vs. Lord Abbett High | Franklin Mutual vs. Ppm High Yield | Franklin Mutual vs. Tiaa Cref High Yield Fund |
| Legg Mason vs. Franklin Mutual Beacon | Legg Mason vs. Templeton Developing Markets | Legg Mason vs. Franklin Mutual Global | Legg Mason vs. Franklin Mutual Global |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |