Correlation Between Templeton Growth and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Templeton Growth and Franklin Mutual 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 Templeton Growth and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Growth Fund and Franklin Mutual Shares, you can compare the effects of market volatilities on Templeton Growth and Franklin Mutual 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 Templeton Growth with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Growth and Franklin Mutual.
Diversification Opportunities for Templeton Growth and Franklin Mutual
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Templeton and Franklin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Growth Fund and Franklin Mutual Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Shares and Templeton Growth 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 Templeton Growth Fund are associated (or correlated) with Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Shares has no effect on the direction of Templeton Growth i.e., Templeton Growth and Franklin Mutual go up and down completely randomly.
Pair Corralation between Templeton Growth and Franklin Mutual
Assuming the 90 days horizon Templeton Growth is expected to generate 12.96 times less return on investment than Franklin Mutual. But when comparing it to its historical volatility, Templeton Growth Fund is 1.26 times less risky than Franklin Mutual. It trades about 0.02 of its potential returns per unit of risk. Franklin Mutual Shares is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,753 in Franklin Mutual Shares on August 28, 2024 and sell it today you would earn a total of 135.00 from holding Franklin Mutual Shares or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Growth Fund vs. Franklin Mutual Shares
Performance |
| Timeline |
| Templeton Growth |
| Franklin Mutual Shares |
Templeton Growth and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Growth and Franklin Mutual
The main advantage of trading using opposite Templeton Growth and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Growth position performs unexpectedly, Franklin Mutual 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 Mutual will offset losses from the drop in Franklin Mutual's long position.| Templeton Growth vs. Franklin Mutual Beacon | Templeton Growth vs. Templeton Developing Markets | Templeton Growth vs. Franklin Mutual Global | Templeton Growth vs. Franklin Mutual Global |
| Franklin Mutual vs. Templeton Growth Fund | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Rising Dividends | Franklin Mutual vs. Franklin Growth Fund |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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