Correlation Between Franklin Mutual and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Templeton Global 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 Templeton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual Shares and Templeton Global Bond, you can compare the effects of market volatilities on Franklin Mutual and Templeton Global 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 Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Templeton Global.
Diversification Opportunities for Franklin Mutual and Templeton Global
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Templeton is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Shares and Templeton Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Bond 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 Shares are associated (or correlated) with Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global Bond has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Templeton Global go up and down completely randomly.
Pair Corralation between Franklin Mutual and Templeton Global
Assuming the 90 days horizon Franklin Mutual Shares is expected to generate 1.42 times more return on investment than Templeton Global. However, Franklin Mutual is 1.42 times more volatile than Templeton Global Bond. It trades about 0.02 of its potential returns per unit of risk. Templeton Global Bond is currently generating about -0.04 per unit of risk. If you would invest 2,364 in Franklin Mutual Shares on October 20, 2024 and sell it today you would earn a total of 186.00 from holding Franklin Mutual Shares or generate 7.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Shares vs. Templeton Global Bond
Performance |
| Timeline |
| Franklin Mutual Shares |
| Templeton Global Bond |
Franklin Mutual and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Templeton Global
The main advantage of trading using opposite Franklin Mutual and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Templeton Global 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 Templeton Global will offset losses from the drop in Templeton Global's long position.| Franklin Mutual vs. Short Term Government Fund | Franklin Mutual vs. Davis Government Bond | Franklin Mutual vs. Intermediate Government Bond | Franklin Mutual vs. Elfun Government Money |
| Templeton Global vs. Rational Dividend Capture | Templeton Global vs. Qs Large Cap | Templeton Global vs. Arrow Managed Futures | Templeton Global vs. Pabrai Wagons Institutional |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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