Correlation Between Franklin Mutual and Clearbridge Value
Can any of the company-specific risk be diversified away by investing in both Franklin Mutual and Clearbridge Value 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 Value 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 Clearbridge Value Trust, you can compare the effects of market volatilities on Franklin Mutual and Clearbridge Value 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 Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Mutual and Clearbridge Value.
Diversification Opportunities for Franklin Mutual and Clearbridge Value
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Clearbridge is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Mutual European and Clearbridge Value Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Value Trust 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 Clearbridge Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Value Trust has no effect on the direction of Franklin Mutual i.e., Franklin Mutual and Clearbridge Value go up and down completely randomly.
Pair Corralation between Franklin Mutual and Clearbridge Value
Assuming the 90 days horizon Franklin Mutual European is expected to under-perform the Clearbridge Value. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Mutual European is 1.18 times less risky than Clearbridge Value. The mutual fund trades about -0.18 of its potential returns per unit of risk. The Clearbridge Value Trust is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 13,654 in Clearbridge Value Trust on August 25, 2024 and sell it today you would earn a total of 657.00 from holding Clearbridge Value Trust or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Mutual European vs. Clearbridge Value Trust
Performance |
| Timeline |
| Franklin Mutual European |
| Clearbridge Value Trust |
Franklin Mutual and Clearbridge Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Mutual and Clearbridge Value
The main advantage of trading using opposite Franklin Mutual and Clearbridge Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Mutual position performs unexpectedly, Clearbridge Value 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 Value will offset losses from the drop in Clearbridge Value'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 |
| Clearbridge Value vs. Quantitative U S | Clearbridge Value vs. Aqr Large Cap | Clearbridge Value vs. Massmutual Select T | Clearbridge Value vs. Qs Large Cap |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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