Correlation Between Franklin Mutual and Gmo Global
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Gmo Global 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 Gmo Global 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 Gmo Global Equity, you can compare the effects of market volatilities on Franklin Mutual and Gmo Global 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 Gmo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Gmo Global.
Diversification Opportunities for Franklin Mutual and Gmo Global
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Gmo is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Gmo Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Global Equity 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 Gmo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Global Equity has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Gmo Global go up and down completely randomly.
Pair Corralation between Franklin Mutual and Gmo Global
Assuming the 90 days horizon Franklin Mutual Global is expected to under-perform the Gmo Global. In addition to that, Franklin Mutual is 1.39 times more volatile than Gmo Global Equity. It trades about -0.32 of its total potential returns per unit of risk. Gmo Global Equity is currently generating about -0.25 per unit of volatility. If you would invest 3,045 in Gmo Global Equity on October 9, 2024 and sell it today you would lose (220.00) from holding Gmo Global Equity or give up 7.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Global vs. Gmo Global Equity
Performance |
| Timeline |
| Franklin Mutual Global |
| Gmo Global Equity |
Franklin Mutual and Gmo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Gmo Global
The main advantage of trading using opposite Franklin Mutual and Gmo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Gmo Global 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 Gmo Global will offset losses from the drop in Gmo Global's long position.| Franklin Mutual vs. Goldman Sachs Technology | Franklin Mutual vs. Icon Information Technology | Franklin Mutual vs. Science Technology Fund | Franklin Mutual vs. Columbia Global Technology |
| Gmo Global vs. Dunham Emerging Markets | Gmo Global vs. Artisan Developing World | Gmo Global vs. Extended Market Index | Gmo Global vs. T Rowe Price |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stocks Directory Find actively traded stocks across global markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |