Correlation Between Franklin Mutual and Vanguard Sumer
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Vanguard Sumer 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 Vanguard Sumer 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 Vanguard Sumer Staples, you can compare the effects of market volatilities on Franklin Mutual and Vanguard Sumer 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 Vanguard Sumer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Vanguard Sumer.
Diversification Opportunities for Franklin Mutual and Vanguard Sumer
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Vanguard is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Vanguard Sumer Staples in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Sumer Staples 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 Vanguard Sumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Sumer Staples has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Vanguard Sumer go up and down completely randomly.
Pair Corralation between Franklin Mutual and Vanguard Sumer
Assuming the 90 days horizon Franklin Mutual is expected to generate 2.05 times less return on investment than Vanguard Sumer. In addition to that, Franklin Mutual is 1.18 times more volatile than Vanguard Sumer Staples. It trades about 0.06 of its total potential returns per unit of risk. Vanguard Sumer Staples is currently generating about 0.14 per unit of volatility. If you would invest 8,578 in Vanguard Sumer Staples on September 4, 2024 and sell it today you would earn a total of 2,450 from holding Vanguard Sumer Staples or generate 28.56% 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. Vanguard Sumer Staples
Performance |
| Timeline |
| Franklin Mutual Global |
| Vanguard Sumer Staples |
Franklin Mutual and Vanguard Sumer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Vanguard Sumer
The main advantage of trading using opposite Franklin Mutual and Vanguard Sumer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Vanguard Sumer 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 Vanguard Sumer will offset losses from the drop in Vanguard Sumer's long position.| Franklin Mutual vs. Franklin Mutual Beacon | Franklin Mutual vs. Templeton Developing Markets | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Mutual Global |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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