Correlation Between Franklin Mutual and Great-west Multi-manager
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Great-west Multi-manager 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 Great-west Multi-manager 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 Great West Multi Manager Large, you can compare the effects of market volatilities on Franklin Mutual and Great-west Multi-manager 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 Great-west Multi-manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Great-west Multi-manager.
Diversification Opportunities for Franklin Mutual and Great-west Multi-manager
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Great-west is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Great West Multi Manager Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great-west Multi-manager 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 Great-west Multi-manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great-west Multi-manager has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Great-west Multi-manager go up and down completely randomly.
Pair Corralation between Franklin Mutual and Great-west Multi-manager
Assuming the 90 days horizon Franklin Mutual is expected to generate 2.05 times less return on investment than Great-west Multi-manager. But when comparing it to its historical volatility, Franklin Mutual Global is 1.4 times less risky than Great-west Multi-manager. It trades about 0.19 of its potential returns per unit of risk. Great West Multi Manager Large is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,237 in Great West Multi Manager Large on September 4, 2024 and sell it today you would earn a total of 57.00 from holding Great West Multi Manager Large or generate 4.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Franklin Mutual Global vs. Great West Multi Manager Large
Performance |
| Timeline |
| Franklin Mutual Global |
| Great-west Multi-manager |
Franklin Mutual and Great-west Multi-manager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Great-west Multi-manager
The main advantage of trading using opposite Franklin Mutual and Great-west Multi-manager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Great-west Multi-manager 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 Great-west Multi-manager will offset losses from the drop in Great-west Multi-manager's long position.| Franklin Mutual vs. Franklin Mutual Beacon | Franklin Mutual vs. Templeton Developing Markets | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Templeton Foreign Fund |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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