Correlation Between Franklin Mutual and Us Government
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Us Government 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 Us Government 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 Us Government Securities, you can compare the effects of market volatilities on Franklin Mutual and Us Government 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 Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Us Government.
Diversification Opportunities for Franklin Mutual and Us Government
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and RGVJX is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Quest and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities 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 Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Us Government go up and down completely randomly.
Pair Corralation between Franklin Mutual and Us Government
Assuming the 90 days horizon Franklin Mutual Quest is expected to generate 1.8 times more return on investment than Us Government. However, Franklin Mutual is 1.8 times more volatile than Us Government Securities. It trades about 0.1 of its potential returns per unit of risk. Us Government Securities is currently generating about -0.08 per unit of risk. If you would invest 1,473 in Franklin Mutual Quest on September 2, 2024 and sell it today you would earn a total of 52.00 from holding Franklin Mutual Quest or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual Quest vs. Us Government Securities
Performance |
| Timeline |
| Franklin Mutual Quest |
| Us Government Securities |
Franklin Mutual and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Us Government
The main advantage of trading using opposite Franklin Mutual and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| Franklin Mutual vs. Franklin Mutual Beacon | Franklin Mutual vs. Templeton Developing Markets | Franklin Mutual vs. Franklin Mutual Global | Franklin Mutual vs. Franklin Mutual Global |
| Us Government vs. Barings Global Floating | Us Government vs. Wasatch Global Opportunities | Us Government vs. Dreyfusstandish Global Fixed | Us Government vs. Blue Current 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 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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