Correlation Between Franklin Mutual and Franklin Oregon
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin Oregon 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 Oregon 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 Oregon Tax Free, you can compare the effects of market volatilities on Franklin Mutual and Franklin Oregon 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 Oregon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin Oregon.
Diversification Opportunities for Franklin Mutual and Franklin Oregon
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Franklin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Franklin Oregon Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Oregon Tax 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 Oregon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Oregon Tax has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin Oregon go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin Oregon
Assuming the 90 days horizon Franklin Mutual is expected to generate 4.15 times less return on investment than Franklin Oregon. In addition to that, Franklin Mutual is 4.37 times more volatile than Franklin Oregon Tax Free. It trades about 0.03 of its total potential returns per unit of risk. Franklin Oregon Tax Free is currently generating about 0.45 per unit of volatility. If you would invest 1,052 in Franklin Oregon Tax Free on September 12, 2024 and sell it today you would earn a total of 11.00 from holding Franklin Oregon Tax Free or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Mutual Global vs. Franklin Oregon Tax Free
Performance |
| Timeline |
| Franklin Mutual Global |
| Franklin Oregon Tax |
Franklin Mutual and Franklin Oregon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin Oregon
The main advantage of trading using opposite Franklin Mutual and Franklin Oregon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin Oregon 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 Oregon will offset losses from the drop in Franklin Oregon'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 Oregon vs. New Jersey Tax Free | Franklin Oregon vs. Maryland Tax Free Bond | Franklin Oregon vs. New York Tax Free | Franklin Oregon vs. Maryland Short Term Tax Free |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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