Correlation Between Franklin Mutual and Clearbridge Small
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Clearbridge Small 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 Clearbridge Small 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 Clearbridge Small Cap, you can compare the effects of market volatilities on Franklin Mutual and Clearbridge Small 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 Clearbridge Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Clearbridge Small.
Diversification Opportunities for Franklin Mutual and Clearbridge Small
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Clearbridge is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Clearbridge Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Small Cap 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 Clearbridge Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Small Cap has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Clearbridge Small go up and down completely randomly.
Pair Corralation between Franklin Mutual and Clearbridge Small
Assuming the 90 days horizon Franklin Mutual is expected to generate 11.6 times less return on investment than Clearbridge Small. But when comparing it to its historical volatility, Franklin Mutual Global is 2.72 times less risky than Clearbridge Small. It trades about 0.05 of its potential returns per unit of risk. Clearbridge Small Cap is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 3,650 in Clearbridge Small Cap on August 26, 2024 and sell it today you would earn a total of 298.00 from holding Clearbridge Small Cap or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Global vs. Clearbridge Small Cap
Performance |
| Timeline |
| Franklin Mutual Global |
| Clearbridge Small Cap |
Franklin Mutual and Clearbridge Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Clearbridge Small
The main advantage of trading using opposite Franklin Mutual and Clearbridge Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Clearbridge Small 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 Clearbridge Small will offset losses from the drop in Clearbridge Small's long position.| Franklin Mutual vs. Lord Abbett Small | Franklin Mutual vs. Fidelity Small Cap | Franklin Mutual vs. Amg River Road | Franklin Mutual vs. American Century Etf |
| Clearbridge Small vs. Franklin Mutual Beacon | Clearbridge Small vs. Templeton Developing Markets | Clearbridge Small vs. Franklin Mutual Global | Clearbridge Small 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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