Correlation Between Franklin Mutual and K2 Alternative
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and K2 Alternative 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 K2 Alternative 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 K2 Alternative Strategies, you can compare the effects of market volatilities on Franklin Mutual and K2 Alternative 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 K2 Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and K2 Alternative.
Diversification Opportunities for Franklin Mutual and K2 Alternative
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and FSKKX is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and K2 Alternative Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K2 Alternative Strategies 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 K2 Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K2 Alternative Strategies has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and K2 Alternative go up and down completely randomly.
Pair Corralation between Franklin Mutual and K2 Alternative
Assuming the 90 days horizon Franklin Mutual Global is expected to generate 4.18 times more return on investment than K2 Alternative. However, Franklin Mutual is 4.18 times more volatile than K2 Alternative Strategies. It trades about 0.04 of its potential returns per unit of risk. K2 Alternative Strategies is currently generating about 0.12 per unit of risk. If you would invest 2,780 in Franklin Mutual Global on August 27, 2024 and sell it today you would earn a total of 399.00 from holding Franklin Mutual Global or generate 14.35% 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. K2 Alternative Strategies
Performance |
| Timeline |
| Franklin Mutual Global |
| K2 Alternative Strategies |
Franklin Mutual and K2 Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and K2 Alternative
The main advantage of trading using opposite Franklin Mutual and K2 Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, K2 Alternative 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 K2 Alternative will offset losses from the drop in K2 Alternative's long position.| Franklin Mutual vs. Vanguard Small Cap Index | Franklin Mutual vs. Baird Smallmid Cap | Franklin Mutual vs. Chartwell Small Cap | Franklin Mutual vs. Massmutual Select Small |
| K2 Alternative vs. Franklin Mutual Beacon | K2 Alternative vs. Templeton Developing Markets | K2 Alternative vs. Franklin Mutual Global | K2 Alternative vs. Franklin Mutual Global |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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