Correlation Between Franklin Mutual and Franklin New
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin New 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 Franklin New 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 Franklin New York, you can compare the effects of market volatilities on Franklin Mutual and Franklin New 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 Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin New.
Diversification Opportunities for Franklin Mutual and Franklin New
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Franklin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York 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 Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin New go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin New
Assuming the 90 days horizon Franklin Mutual is expected to generate 4.98 times less return on investment than Franklin New. In addition to that, Franklin Mutual is 3.2 times more volatile than Franklin New York. It trades about 0.03 of its total potential returns per unit of risk. Franklin New York is currently generating about 0.4 per unit of volatility. If you would invest 1,002 in Franklin New York on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Franklin New York or generate 1.2% 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. Franklin New York
Performance |
| Timeline |
| Franklin Mutual Global |
| Franklin New York |
Franklin Mutual and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin New
The main advantage of trading using opposite Franklin Mutual and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin New 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 Franklin New will offset losses from the drop in Franklin New's long position.| Franklin Mutual vs. Fidelity Capital Income | Franklin Mutual vs. Prudential High Yield | Franklin Mutual vs. City National Rochdale | Franklin Mutual vs. Buffalo High Yield |
| Franklin New vs. New Jersey Tax Free | Franklin New vs. T Rowe Price | Franklin New vs. Virginia Tax Free Bond | Franklin New 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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