Correlation Between Franklin Mutual and Transamerica High
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Transamerica High 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 Transamerica High 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 Transamerica High Yield, you can compare the effects of market volatilities on Franklin Mutual and Transamerica High 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 Transamerica High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Transamerica High.
Diversification Opportunities for Franklin Mutual and Transamerica High
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Transamerica is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Transamerica High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica High Yield 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 Transamerica High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica High Yield has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Transamerica High go up and down completely randomly.
Pair Corralation between Franklin Mutual and Transamerica High
Assuming the 90 days horizon Franklin Mutual Global is expected to generate 2.52 times more return on investment than Transamerica High. However, Franklin Mutual is 2.52 times more volatile than Transamerica High Yield. It trades about 0.05 of its potential returns per unit of risk. Transamerica High Yield is currently generating about 0.08 per unit of risk. If you would invest 2,729 in Franklin Mutual Global on September 3, 2024 and sell it today you would earn a total of 488.00 from holding Franklin Mutual Global or generate 17.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Global vs. Transamerica High Yield
Performance |
| Timeline |
| Franklin Mutual Global |
| Transamerica High Yield |
Franklin Mutual and Transamerica High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Transamerica High
The main advantage of trading using opposite Franklin Mutual and Transamerica High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Transamerica High 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 Transamerica High will offset losses from the drop in Transamerica High'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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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