Correlation Between Franklin Mutual and Neuberger Berman
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Neuberger Berman 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 Neuberger Berman 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 Neuberger Berman Emerging, you can compare the effects of market volatilities on Franklin Mutual and Neuberger Berman 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 Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Neuberger Berman.
Diversification Opportunities for Franklin Mutual and Neuberger Berman
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Neuberger is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Neuberger Berman Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Emerging 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 Neuberger Berman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuberger Berman Emerging has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Neuberger Berman go up and down completely randomly.
Pair Corralation between Franklin Mutual and Neuberger Berman
Assuming the 90 days horizon Franklin Mutual is expected to generate 2.28 times less return on investment than Neuberger Berman. But when comparing it to its historical volatility, Franklin Mutual Global is 1.11 times less risky than Neuberger Berman. It trades about 0.04 of its potential returns per unit of risk. Neuberger Berman Emerging is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,662 in Neuberger Berman Emerging on September 3, 2024 and sell it today you would earn a total of 297.00 from holding Neuberger Berman Emerging or generate 17.87% 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. Neuberger Berman Emerging
Performance |
| Timeline |
| Franklin Mutual Global |
| Neuberger Berman Emerging |
Franklin Mutual and Neuberger Berman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Neuberger Berman
The main advantage of trading using opposite Franklin Mutual and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Neuberger Berman 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 Neuberger Berman will offset losses from the drop in Neuberger Berman'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 |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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