Correlation Between Franklin Mutual and Franklin Connecticut
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Franklin Connecticut 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 Connecticut into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual Quest and Franklin Necticut Tax Free, you can compare the effects of market volatilities on Franklin Mutual and Franklin Connecticut 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 Connecticut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Franklin Connecticut.
Diversification Opportunities for Franklin Mutual and Franklin Connecticut
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Franklin is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Quest and Franklin Necticut Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Necticut Tax 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 Quest are associated (or correlated) with Franklin Connecticut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Necticut Tax has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Franklin Connecticut go up and down completely randomly.
Pair Corralation between Franklin Mutual and Franklin Connecticut
Assuming the 90 days horizon Franklin Mutual Quest is expected to generate 1.43 times more return on investment than Franklin Connecticut. However, Franklin Mutual is 1.43 times more volatile than Franklin Necticut Tax Free. It trades about 0.36 of its potential returns per unit of risk. Franklin Necticut Tax Free is currently generating about 0.2 per unit of risk. If you would invest 1,466 in Franklin Mutual Quest on September 3, 2024 and sell it today you would earn a total of 59.00 from holding Franklin Mutual Quest or generate 4.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Quest vs. Franklin Necticut Tax Free
Performance |
| Timeline |
| Franklin Mutual Quest |
| Franklin Necticut Tax |
Franklin Mutual and Franklin Connecticut Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Franklin Connecticut
The main advantage of trading using opposite Franklin Mutual and Franklin Connecticut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Franklin Connecticut 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 Connecticut will offset losses from the drop in Franklin Connecticut's long position.| Franklin Mutual vs. Jennison Natural Resources | Franklin Mutual vs. Oil Gas Ultrasector | Franklin Mutual vs. Energy Basic Materials | Franklin Mutual vs. Invesco Energy Fund |
| Franklin Connecticut vs. Transamerica Financial Life | Franklin Connecticut vs. Davis Financial Fund | Franklin Connecticut vs. Fidelity Advisor Financial | Franklin Connecticut vs. Goldman Sachs Financial |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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