Correlation Between Franklin Mutual and Franklin Gold
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin Gold 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 Gold 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 Gold Precious, you can compare the effects of market volatilities on Franklin Mutual and Franklin Gold 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 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin Gold.
Diversification Opportunities for Franklin Mutual and Franklin Gold
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and Franklin is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Franklin Gold Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Gold Precious 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 Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Gold Precious has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin Gold go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin Gold
Assuming the 90 days horizon Franklin Mutual Global is expected to generate 0.3 times more return on investment than Franklin Gold. However, Franklin Mutual Global is 3.36 times less risky than Franklin Gold. It trades about 0.12 of its potential returns per unit of risk. Franklin Gold Precious is currently generating about -0.28 per unit of risk. If you would invest 3,156 in Franklin Mutual Global on August 30, 2024 and sell it today you would earn a total of 49.00 from holding Franklin Mutual Global or generate 1.55% 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 Gold Precious
Performance |
| Timeline |
| Franklin Mutual Global |
| Franklin Gold Precious |
Franklin Mutual and Franklin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin Gold
The main advantage of trading using opposite Franklin Mutual and Franklin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin Gold 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 Gold will offset losses from the drop in Franklin Gold's long position.| Franklin Mutual vs. Americafirst Large Cap | Franklin Mutual vs. Dunham Large Cap | Franklin Mutual vs. Tax Managed Large Cap | Franklin Mutual vs. Aqr Large Cap |
| Franklin Gold vs. First Eagle Gold | Franklin Gold vs. Aquagold International | Franklin Gold vs. Morningstar Unconstrained Allocation | Franklin Gold vs. Thrivent 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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