Correlation Between Franklin Mutual and Franklin
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin 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 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 Government Securities, you can compare the effects of market volatilities on Franklin Mutual and Franklin 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin.
Diversification Opportunities for Franklin Mutual and Franklin
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Franklin is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Franklin Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin
Assuming the 90 days horizon Franklin Mutual Global is expected to generate 1.76 times more return on investment than Franklin. However, Franklin Mutual is 1.76 times more volatile than Franklin Government Securities. It trades about 0.04 of its potential returns per unit of risk. Franklin Government Securities is currently generating about 0.01 per unit of risk. If you would invest 2,808 in Franklin Mutual Global on August 27, 2024 and sell it today you would earn a total of 371.00 from holding Franklin Mutual Global or generate 13.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Global vs. Franklin Government Securities
Performance |
| Timeline |
| Franklin Mutual Global |
| Franklin Government |
Franklin Mutual and Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin
The main advantage of trading using opposite Franklin Mutual and Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin 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 will offset losses from the drop in Franklin'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 |
| Franklin vs. Franklin Mutual Beacon | Franklin vs. Templeton Developing Markets | Franklin vs. Franklin Mutual Global | Franklin 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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