Correlation Between Franklin Mutual and Amg River
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Amg River 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 Amg River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Mutual European and Amg River Road, you can compare the effects of market volatilities on Franklin Mutual and Amg River 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 Amg River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Amg River.
Diversification Opportunities for Franklin Mutual and Amg River
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and Amg is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual European and Amg River Road in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg River Road 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 European are associated (or correlated) with Amg River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg River Road has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Amg River go up and down completely randomly.
Pair Corralation between Franklin Mutual and Amg River
Assuming the 90 days horizon Franklin Mutual European is expected to under-perform the Amg River. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Mutual European is 1.53 times less risky than Amg River. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Amg River Road is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,020 in Amg River Road on August 30, 2024 and sell it today you would earn a total of 89.00 from holding Amg River Road or generate 8.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual European vs. Amg River Road
Performance |
| Timeline |
| Franklin Mutual European |
| Amg River Road |
Franklin Mutual and Amg River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Amg River
The main advantage of trading using opposite Franklin Mutual and Amg River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Amg River 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 Amg River will offset losses from the drop in Amg River's long position.| Franklin Mutual vs. Ab Bond Inflation | Franklin Mutual vs. Black Oak Emerging | Franklin Mutual vs. Commodities Strategy Fund | Franklin Mutual vs. Vanguard Emerging Markets |
| Amg River vs. Vanguard Small Cap Value | Amg River vs. Vanguard Small Cap Value | Amg River vs. Us Small Cap | Amg River vs. Us Targeted Value |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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