Correlation Between Mid Cap and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Mid Cap 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 Mid Cap and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap Growth and Franklin Mutual Financial, you can compare the effects of market volatilities on Mid Cap 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 Mid Cap with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Franklin Mutual.
Diversification Opportunities for Mid Cap and Franklin Mutual
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mid and Franklin is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Growth and Franklin Mutual Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Financial and Mid Cap 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 Mid Cap Growth 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 Financial has no effect on the direction of Mid Cap i.e., Mid Cap and Franklin Mutual go up and down completely randomly.
Pair Corralation between Mid Cap and Franklin Mutual
Assuming the 90 days horizon Mid Cap Growth is expected to generate 0.83 times more return on investment than Franklin Mutual. However, Mid Cap Growth is 1.21 times less risky than Franklin Mutual. It trades about 0.09 of its potential returns per unit of risk. Franklin Mutual Financial is currently generating about 0.02 per unit of risk. If you would invest 2,938 in Mid Cap Growth on August 30, 2024 and sell it today you would earn a total of 1,485 from holding Mid Cap Growth or generate 50.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.31% |
| Values | Daily Returns |
Mid Cap Growth vs. Franklin Mutual Financial
Performance |
| Timeline |
| Mid Cap Growth |
| Franklin Mutual Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Mid Cap and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid Cap and Franklin Mutual
The main advantage of trading using opposite Mid Cap and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Cap 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.| Mid Cap vs. Wasatch Small Cap | Mid Cap vs. Victory Trivalent International | Mid Cap vs. John Hancock Disciplined | Mid Cap vs. Mfs Mid Cap |
| Franklin Mutual vs. Franklin Mutual European | Franklin Mutual vs. Franklin Natural Resources | Franklin Mutual vs. Franklin Real Estate | Franklin Mutual vs. Franklin Utilities 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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