Correlation Between Timothy Aggressive and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Timothy Aggressive and Franklin Mutual 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 Timothy Aggressive and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Timothy Aggressive Growth and Franklin Mutual Global, you can compare the effects of market volatilities on Timothy Aggressive and Franklin Mutual 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 Timothy Aggressive with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timothy Aggressive and Franklin Mutual.
Diversification Opportunities for Timothy Aggressive and Franklin Mutual
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Timothy and Franklin is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Timothy Aggressive Growth and Franklin Mutual Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Global and Timothy Aggressive 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 Timothy Aggressive Growth are associated (or correlated) with Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Global has no effect on the direction of Timothy Aggressive i.e., Timothy Aggressive and Franklin Mutual go up and down completely randomly.
Pair Corralation between Timothy Aggressive and Franklin Mutual
Assuming the 90 days horizon Timothy Aggressive Growth is expected to generate 1.38 times more return on investment than Franklin Mutual. However, Timothy Aggressive is 1.38 times more volatile than Franklin Mutual Global. It trades about 0.09 of its potential returns per unit of risk. Franklin Mutual Global is currently generating about 0.04 per unit of risk. If you would invest 917.00 in Timothy Aggressive Growth on September 3, 2024 and sell it today you would earn a total of 565.00 from holding Timothy Aggressive Growth or generate 61.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Timothy Aggressive Growth vs. Franklin Mutual Global
Performance |
| Timeline |
| Timothy Aggressive Growth |
| Franklin Mutual Global |
Timothy Aggressive and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Timothy Aggressive and Franklin Mutual
The main advantage of trading using opposite Timothy Aggressive and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timothy Aggressive position performs unexpectedly, Franklin Mutual 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 Franklin Mutual will offset losses from the drop in Franklin Mutual's long position.| Timothy Aggressive vs. Franklin Mutual Global | Timothy Aggressive vs. Ab Global Real | Timothy Aggressive vs. Dreyfusstandish Global Fixed | Timothy Aggressive vs. Nationwide Global Equity |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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