Correlation Between Franklin Mutual and Franklin New
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin New 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 New 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 Franklin New York, you can compare the effects of market volatilities on Franklin Mutual and Franklin New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin New.
Diversification Opportunities for Franklin Mutual and Franklin New
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Franklin is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Shares and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York 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 Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin New go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin New
Assuming the 90 days horizon Franklin Mutual Shares is expected to generate 3.75 times more return on investment than Franklin New. However, Franklin Mutual is 3.75 times more volatile than Franklin New York. It trades about 0.31 of its potential returns per unit of risk. Franklin New York is currently generating about 0.22 per unit of risk. If you would invest 2,727 in Franklin Mutual Shares on August 30, 2024 and sell it today you would earn a total of 164.00 from holding Franklin Mutual Shares or generate 6.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Shares vs. Franklin New York
Performance |
| Timeline |
| Franklin Mutual Shares |
| Franklin New York |
Franklin Mutual and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin New
The main advantage of trading using opposite Franklin Mutual and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin New 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 New will offset losses from the drop in Franklin New's long position.| Franklin Mutual vs. Artisan High Income | Franklin Mutual vs. California Bond Fund | Franklin Mutual vs. T Rowe Price | Franklin Mutual vs. Oklahoma Municipal Fund |
| Franklin New vs. Franklin Mutual Beacon | Franklin New vs. Templeton Developing Markets | Franklin New vs. Franklin Mutual Global | Franklin New vs. Franklin Mutual Global |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Positions Ratings 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 |