Correlation Between Franklin Mutual and Franklin Utilities
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin Utilities 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 Utilities 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 Utilities Fund, you can compare the effects of market volatilities on Franklin Mutual and Franklin Utilities 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 Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin Utilities.
Diversification Opportunities for Franklin Mutual and Franklin Utilities
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Franklin is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Franklin Utilities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Utilities 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 Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Utilities has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin Utilities go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin Utilities
Assuming the 90 days horizon Franklin Mutual Global is expected to generate 0.43 times more return on investment than Franklin Utilities. However, Franklin Mutual Global is 2.32 times less risky than Franklin Utilities. It trades about 0.11 of its potential returns per unit of risk. Franklin Utilities Fund is currently generating about -0.05 per unit of risk. If you would invest 3,149 in Franklin Mutual Global on September 13, 2024 and sell it today you would earn a total of 26.00 from holding Franklin Mutual Global or generate 0.83% 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. Franklin Utilities Fund
Performance |
| Timeline |
| Franklin Mutual Global |
| Franklin Utilities |
Franklin Mutual and Franklin Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin Utilities
The main advantage of trading using opposite Franklin Mutual and Franklin Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin Utilities 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 Utilities will offset losses from the drop in Franklin Utilities' long position.| Franklin Mutual vs. Schwab Government Money | Franklin Mutual vs. Virtus Seix Government | Franklin Mutual vs. Us Government Securities | Franklin Mutual vs. Aig Government Money |
| Franklin Utilities vs. T Rowe Price | Franklin Utilities vs. Calvert High Yield | Franklin Utilities vs. Artisan High Income | Franklin Utilities vs. Pace High Yield |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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