Correlation Between Franklin Mutual and Mutual Quest
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Mutual Quest 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 Mutual Quest 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 Mutual Quest, you can compare the effects of market volatilities on Franklin Mutual and Mutual Quest 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 Mutual Quest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Mutual Quest.
Diversification Opportunities for Franklin Mutual and Mutual Quest
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Mutual is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Beacon and Mutual Quest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mutual Quest 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 Mutual Quest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mutual Quest has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Mutual Quest go up and down completely randomly.
Pair Corralation between Franklin Mutual and Mutual Quest
Assuming the 90 days horizon Franklin Mutual Beacon is expected to generate 1.12 times more return on investment than Mutual Quest. However, Franklin Mutual is 1.12 times more volatile than Mutual Quest. It trades about 0.35 of its potential returns per unit of risk. Mutual Quest is currently generating about 0.39 per unit of risk. If you would invest 1,681 in Franklin Mutual Beacon on September 1, 2024 and sell it today you would earn a total of 75.00 from holding Franklin Mutual Beacon or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Mutual Beacon vs. Mutual Quest
Performance |
| Timeline |
| Franklin Mutual Beacon |
| Mutual Quest |
Franklin Mutual and Mutual Quest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Mutual Quest
The main advantage of trading using opposite Franklin Mutual and Mutual Quest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Mutual Quest 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 Mutual Quest will offset losses from the drop in Mutual Quest's long position.| Franklin Mutual vs. Franklin Mutual Beacon | Franklin Mutual vs. Templeton Developing Markets | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Mutual Global |
| Mutual Quest vs. Prudential Government Money | Mutual Quest vs. John Hancock Money | Mutual Quest vs. Blackrock Exchange Portfolio | Mutual Quest vs. Bbh Trust |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |