Correlation Between Franklin Mutual and Franklin High
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin High 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 High 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 High Yield, you can compare the effects of market volatilities on Franklin Mutual and Franklin High 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 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin High.
Diversification Opportunities for Franklin Mutual and Franklin High
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Franklin is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield 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 High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Yield has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin High go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin High
Assuming the 90 days horizon Franklin Mutual Global is expected to generate 2.54 times more return on investment than Franklin High. However, Franklin Mutual is 2.54 times more volatile than Franklin High Yield. It trades about 0.06 of its potential returns per unit of risk. Franklin High Yield is currently generating about 0.09 per unit of risk. If you would invest 2,632 in Franklin Mutual Global on September 12, 2024 and sell it today you would earn a total of 567.00 from holding Franklin Mutual Global or generate 21.54% 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 High Yield
Performance |
| Timeline |
| Franklin Mutual Global |
| Franklin High Yield |
Franklin Mutual and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin High
The main advantage of trading using opposite Franklin Mutual and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin High 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 High will offset losses from the drop in Franklin High'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 |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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