Correlation Between Franklin Mutual and Clearbridge Large
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Clearbridge Large 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 Clearbridge Large 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 Clearbridge Large Cap, you can compare the effects of market volatilities on Franklin Mutual and Clearbridge Large 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 Clearbridge Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Clearbridge Large.
Diversification Opportunities for Franklin Mutual and Clearbridge Large
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Franklin and Clearbridge is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual Quest and Clearbridge Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Large Cap 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 Clearbridge Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Large Cap has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Clearbridge Large go up and down completely randomly.
Pair Corralation between Franklin Mutual and Clearbridge Large
Assuming the 90 days horizon Franklin Mutual Quest is expected to generate 0.4 times more return on investment than Clearbridge Large. However, Franklin Mutual Quest is 2.5 times less risky than Clearbridge Large. It trades about 0.23 of its potential returns per unit of risk. Clearbridge Large Cap is currently generating about -0.17 per unit of risk. If you would invest 1,452 in Franklin Mutual Quest on December 1, 2024 and sell it today you would earn a total of 28.00 from holding Franklin Mutual Quest or generate 1.93% 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. Clearbridge Large Cap
Performance |
| Timeline |
| Franklin Mutual Quest |
| Clearbridge Large Cap |
Franklin Mutual and Clearbridge Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Clearbridge Large
The main advantage of trading using opposite Franklin Mutual and Clearbridge Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Clearbridge Large 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 Clearbridge Large will offset losses from the drop in Clearbridge Large's long position.| Franklin Mutual vs. Rbc Emerging Markets | Franklin Mutual vs. Tfa Alphagen Growth | Franklin Mutual vs. Intal High Relative | Franklin Mutual vs. Federated Government Income |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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