Correlation Between Franklin Mutual and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin Growth 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 Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual European and Franklin Growth Fund, you can compare the effects of market volatilities on Franklin Mutual and Franklin Growth 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 Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin Growth.
Diversification Opportunities for Franklin Mutual and Franklin Growth
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and FRANKLIN is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual European and Franklin Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth 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 European are associated (or correlated) with Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin Growth go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin Growth
Assuming the 90 days horizon Franklin Mutual European is expected to under-perform the Franklin Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Mutual European is 1.02 times less risky than Franklin Growth. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Franklin Growth Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 11,963 in Franklin Growth Fund on August 29, 2024 and sell it today you would earn a total of 581.00 from holding Franklin Growth Fund or generate 4.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual European vs. Franklin Growth Fund
Performance |
| Timeline |
| Franklin Mutual European |
| Franklin Growth |
Franklin Mutual and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin Growth
The main advantage of trading using opposite Franklin Mutual and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin Growth 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 Growth will offset losses from the drop in Franklin Growth's long position.| Franklin Mutual vs. Ab Impact Municipal | Franklin Mutual vs. Versatile Bond Portfolio | Franklin Mutual vs. Bbh Intermediate Municipal | Franklin Mutual vs. Barings Active Short |
| Franklin Growth vs. Siit Ultra Short | Franklin Growth vs. Old Westbury Short Term | Franklin Growth vs. Franklin Federal Limited Term | Franklin Growth vs. Jhancock Short Duration |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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