Correlation Between Templeton Growth and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Templeton Growth and Franklin Mutual 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 Templeton Growth and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Growth Fund and Franklin Mutual Global, you can compare the effects of market volatilities on Templeton Growth and Franklin Mutual 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 Templeton Growth with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Growth and Franklin Mutual.
Diversification Opportunities for Templeton Growth and Franklin Mutual
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Templeton and Franklin is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Growth Fund and Franklin Mutual Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Global and Templeton Growth 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 Templeton Growth Fund are associated (or correlated) with Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Global has no effect on the direction of Templeton Growth i.e., Templeton Growth and Franklin Mutual go up and down completely randomly.
Pair Corralation between Templeton Growth and Franklin Mutual
Assuming the 90 days horizon Templeton Growth Fund is expected to generate 1.02 times more return on investment than Franklin Mutual. However, Templeton Growth is 1.02 times more volatile than Franklin Mutual Global. It trades about 0.07 of its potential returns per unit of risk. Franklin Mutual Global is currently generating about 0.05 per unit of risk. If you would invest 2,333 in Templeton Growth Fund on August 28, 2024 and sell it today you would earn a total of 413.00 from holding Templeton Growth Fund or generate 17.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Growth Fund vs. Franklin Mutual Global
Performance |
| Timeline |
| Templeton Growth |
| Franklin Mutual Global |
Templeton Growth and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Growth and Franklin Mutual
The main advantage of trading using opposite Templeton Growth and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Growth position performs unexpectedly, Franklin Mutual 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 Mutual will offset losses from the drop in Franklin Mutual's long position.| Templeton Growth vs. Franklin Mutual Beacon | Templeton Growth vs. Templeton Developing Markets | Templeton Growth vs. Franklin Mutual Global | Templeton Growth vs. Franklin Mutual Global |
| Franklin Mutual vs. Templeton Developing Markets | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Templeton Foreign Fund |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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