Correlation Between Franklin Mutual and Franklin Strategic
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin Strategic 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 Strategic 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 Strategic Income, you can compare the effects of market volatilities on Franklin Mutual and Franklin Strategic 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 Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin Strategic.
Diversification Opportunities for Franklin Mutual and Franklin Strategic
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Franklin is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Franklin Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Strategic Income 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 Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Strategic Income has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin Strategic go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin Strategic
Assuming the 90 days horizon Franklin Mutual Global is expected to generate 1.97 times more return on investment than Franklin Strategic. However, Franklin Mutual is 1.97 times more volatile than Franklin Strategic Income. It trades about 0.03 of its potential returns per unit of risk. Franklin Strategic Income is currently generating about 0.05 per unit of risk. If you would invest 3,192 in Franklin Mutual Global on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Franklin Mutual Global or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Mutual Global vs. Franklin Strategic Income
Performance |
| Timeline |
| Franklin Mutual Global |
| Franklin Strategic Income |
Franklin Mutual and Franklin Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin Strategic
The main advantage of trading using opposite Franklin Mutual and Franklin Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin Strategic 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 Strategic will offset losses from the drop in Franklin Strategic'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 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |