Correlation Between Franklin Mutual and Baron Opportunity
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Baron Opportunity 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 Baron Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual Beacon and Baron Opportunity Fund, you can compare the effects of market volatilities on Franklin Mutual and Baron Opportunity 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 Baron Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Baron Opportunity.
Diversification Opportunities for Franklin Mutual and Baron Opportunity
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Franklin and Baron is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Beacon and Baron Opportunity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Opportunity 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 Beacon are associated (or correlated) with Baron Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Opportunity has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Baron Opportunity go up and down completely randomly.
Pair Corralation between Franklin Mutual and Baron Opportunity
Assuming the 90 days horizon Franklin Mutual is expected to generate 3.07 times less return on investment than Baron Opportunity. But when comparing it to its historical volatility, Franklin Mutual Beacon is 1.86 times less risky than Baron Opportunity. It trades about 0.07 of its potential returns per unit of risk. Baron Opportunity Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,390 in Baron Opportunity Fund on September 3, 2024 and sell it today you would earn a total of 1,519 from holding Baron Opportunity Fund or generate 44.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Beacon vs. Baron Opportunity Fund
Performance |
| Timeline |
| Franklin Mutual Beacon |
| Baron Opportunity |
Franklin Mutual and Baron Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Baron Opportunity
The main advantage of trading using opposite Franklin Mutual and Baron Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Baron Opportunity 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 Baron Opportunity will offset losses from the drop in Baron Opportunity's long position.| Franklin Mutual vs. Prudential Government Money | Franklin Mutual vs. Dws Government Money | Franklin Mutual vs. Elfun Government Money | Franklin Mutual vs. Aig Government Money |
| Baron Opportunity vs. Baron Partners Fund | Baron Opportunity vs. Baron Global Advantage | Baron Opportunity vs. Baron Fifth Avenue | Baron Opportunity vs. Baron Focused Growth |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |