Correlation Between Franklin Mutual and Small Pany

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Small Pany 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 Small Pany 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 Small Pany Growth, you can compare the effects of market volatilities on Franklin Mutual and Small Pany 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 Small Pany. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Small Pany.

Diversification Opportunities for Franklin Mutual and Small Pany

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Franklin and Small is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Quest and Small Pany Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Pany 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 Quest are associated (or correlated) with Small Pany. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Pany Growth has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Small Pany go up and down completely randomly.

Pair Corralation between Franklin Mutual and Small Pany

Assuming the 90 days horizon Franklin Mutual is expected to generate 19.94 times less return on investment than Small Pany. But when comparing it to its historical volatility, Franklin Mutual Quest is 3.42 times less risky than Small Pany. It trades about 0.06 of its potential returns per unit of risk. Small Pany Growth is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  1,145  in Small Pany Growth on September 12, 2024 and sell it today you would earn a total of  533.00  from holding Small Pany Growth or generate 46.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Franklin Mutual Quest  vs.  Small Pany Growth

 Performance 
       Timeline  
Franklin Mutual Quest 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Mutual Quest are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Franklin Mutual is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Small Pany Growth 

Risk-Adjusted Performance

27 of 100

 
Weak
 
Strong
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Small Pany Growth are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Small Pany showed solid returns over the last few months and may actually be approaching a breakup point.

Franklin Mutual and Small Pany Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Franklin Mutual and Small Pany

The main advantage of trading using opposite Franklin Mutual and Small Pany positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Small Pany 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 Small Pany will offset losses from the drop in Small Pany's long position.
The idea behind Franklin Mutual Quest and Small Pany Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

Other Complementary Tools

Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk