Correlation Between Franklin Mutual and Americafirst Large
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Americafirst Large 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 Americafirst Large 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 Americafirst Large Cap, you can compare the effects of market volatilities on Franklin Mutual and Americafirst Large 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 Americafirst Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Americafirst Large.
Diversification Opportunities for Franklin Mutual and Americafirst Large
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Franklin and Americafirst is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Global and Americafirst Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Large Cap 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 Americafirst Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Large Cap has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Americafirst Large go up and down completely randomly.
Pair Corralation between Franklin Mutual and Americafirst Large
Assuming the 90 days horizon Franklin Mutual is expected to generate 9.76 times less return on investment than Americafirst Large. But when comparing it to its historical volatility, Franklin Mutual Global is 1.76 times less risky than Americafirst Large. It trades about 0.05 of its potential returns per unit of risk. Americafirst Large Cap is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,361 in Americafirst Large Cap on August 29, 2024 and sell it today you would earn a total of 103.00 from holding Americafirst Large Cap or generate 7.57% 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. Americafirst Large Cap
Performance |
| Timeline |
| Franklin Mutual Global |
| Americafirst Large Cap |
Franklin Mutual and Americafirst Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Americafirst Large
The main advantage of trading using opposite Franklin Mutual and Americafirst Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Americafirst Large 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 Americafirst Large will offset losses from the drop in Americafirst Large'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 |
| Americafirst Large vs. Vanguard Total Stock | Americafirst Large vs. Vanguard 500 Index | Americafirst Large vs. Vanguard Total Stock | Americafirst Large vs. Vanguard Total Stock |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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